ICRA

ICRA has downgraded the ratings of Shapoorji Pallonji and Company to BBB+ from A- and placed it on rating watch with developing implications.

The earnings of primary base metal industry is expected to remain weak in the near-term, mainly on high energy cost and range-bound market rates, according to ICRA. While better coal linkage availability would provide some respite, the margins would remain significantly lower than the levels seen in FY 2021-2022, the ratings agency said in its latest report. ICRA expects the "primary base metal industry's earnings to weaken significantly in FY2023 and remain so in the near-term, owing to stubbornly high energy costs and range-bound metal prices," it said. The list of base metals include aluminium, copper, nickel, tin, lead and zinc. "The operating margins of domestic base metal entities are estimated to weaken significantly by around 10 percentage points in FY23, owing to the double whammy of metal price corrections and elevated coal costs. "Consequently, the operating margin of domestic entities is expected to remain range-bound at 19-20 per cent in FY24," Jayanta Roy, Senior ...

Interest rate hikes, global slowdown, stubborn inflation pose risk

The government borrowing programme is scheduled to be completed in 26 weekly tranches of Rs 31,000-39,000 crore each

14 states, one UT raise Rs 41,200 cr, amount is 67% higher than that indicated for State Government Securities (SGS) for this week in the Q4FY23 auction calendar

Rating agency cites sector's improved solvency profile, loan book growth and earnings

Icra on Wednesday revised its outlook for domestic steel demand to 7-8 per cent for the next fiscal. Earlier, the ratings agency had estimated the demand to grow in the range of 6-7 per cent. "With the central government's capex outlay in FY2024, Icra has revised upwards its steel consumption growth estimate for FY2024 to 7-8 per cent from 6-7 per cent," it said in a report. In 2023-24, the capital expenditure is budgeted at Rs 10 lakh crore which will constitute 3.3 per cent of GDP. In the ongoing fiscal also, the domestic steel consumption growth has remained strong supported by the government's push for infrastructure-led economic growth. Jayanta Roy, Senior Vice-President & Group Head - Corporate Sector Ratings at ICRA, said, "With steel consumption expected to grow in high-single digits next year, we expect the industry's capacity utilisation rate to improve to around 80 per cent in FY2024, despite the commissioning of some new expansion projects." The consumption of finishe

Domestic pharmaceutical industry is expected to witness a revenue growth of 6-8 per cent in the next fiscal, rating agency Icra said on Thursday. Despite several disruptive events, the Indian pharmaceutical market (IPM) witnessed a healthy CAGR of 10.9 per cent between FY2012 and FY2022. "Going forward, ICRA expects revenues for its sample set to increase by 6-8 per cent in FY2024 against 3-4 per cent growth in FY2023," Icra Assistant Vice President & Sector Head - Corporate Ratings Mythri Macherla said in a statement. Structural factors such as ageing population and continued rise in lifestyle/chronic diseases, in addition to WPI-linked price hikes for NLEM products, new product introductions, and annual price hikes for non-NLEM products, are expected to support revenue growth for the industry, she added. Since FY2018, IPM growth has largely been supported by price increases and new product introductions, even as volume growth remained between 2-3 per cent each fiscal, Macherla ..

Daily departures averaged 2,967, up from 2,044 in February 2022 and 2,900 in January 2023, but down from 3,137 in February 2020

Domestic air passenger traffic is projected to have touched around 1.19 crore in February, only about 4 per cent lower compared to pre-Covid levels, rating agency Icra said on Monday. Icra has also revised the outlook for the domestic aviation industry to stable from negative, citing a fast-paced recovery in domestic passenger traffic in FY 2023 and the expected continuation of the same in FY 2024. "For February 2023, domestic air passenger traffic has been estimated at around 119 lakh, around 5 per cent lower than around 125 lakh in January 2023. "However, it witnessed a YoY (Year-on-Year) growth of around 54 per cent, as February 2022 was marginally impacted by the Omicron variant of Covid 19. Domestic passenger traffic in February 2023 was lower by only around 4 per cent compared to the pre-Covid levels (i.e. February 2020)," it said in a report. For the first 11 months of the current fiscal, Icra said domestic passenger traffic is projected at around 12.29 crore, a y-o-y growth

Housing sales in volume terms grew 11 per cent in the third quarter of this fiscal across seven cities on better demand, according to rating agency ICRA. "At 149 million square feet (msf), the reported sales in Q3 FY2023 in the top seven cities in India is the highest quarterly sales recorded in over ten years," ICRA said in a statement on Wednesday. Residential real estate sector saw strong demand in Q3 of FY2023 with 11 per cent year-on-year (YoY) growth in area sold, it added. The area sold in the first nine months of FY23 increased to 412 msf against 307 msf in the corresponding period of the previous year. Post pandemic, ICRA noted that there has been a gradual shift in the overall segment-wise composition with a rise in the share of the luxury and mid segments to the overall sales across the top seven cities -- Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), National Capital Region (NCR) and Pune. The share of the luxury and mid segments to the ove

Rating agency Icra has revised thermal power sector outlook to 'stable' from 'negative' due to strong demand growth and realisation of dues from discoms under LPS (late payment surcharge) scheme. The Icra's outlook for the thermal power segment has been revised to stable from negative, supported by the healthy improvement in the thermal PLF (plant load factor or capacity utilisation) level in FY2023, which is likely to sustain in FY2024, coupled with the reduction in dues from state distribution utilities (discoms), an Icra statement said. The PLF improvement is driven by the strong recovery in electricity demand growth in the country. A sustained growth in electricity demand is expected to improve the visibility on the signing of new power purchase agreements (PPAs) for the thermal IPPs (independent power producers), it stated. Vikram V, Vice President & Sector Head - corporate ratings, Icra, said, "The all-India thermal PLF level is expected to improve from 58.9 per cent in ...

Affirms ratings on long-term loans of both firms

India Inc's operating profit margin narrowed by a sharp 2.37 per cent in the December quarter to 16.3 per cent on an annual basis due to inflation and rising energy costs, a domestic ratings agency said on Monday. When viewed sequentially, the operating profit margin for the December quarter expanded by 1.80 per cent over the preceding September quarter, Icra Ratings said, attributing the same to the easing in input costs and also price hikes by many companies. Going forward, while price hikes and sequential input cost reductions can boost margins in the near term, geopolitical tensions, recessionary concerns, and forex volatility continue to pose risks, the agency said. The revenue of companies, excluding those in the financial sector, grew 17.2 per cent, which was as per expectations, the agency said, adding that hotels, oil and gas, auto, airlines, and power sectors led the way. However, the revenue growth was a muted 1.4 per cent from a sequential perspective due to inflationar

Current data centre capacity in India pegged at 870 Mw. Country likely to add 4,900-5,000 Mw; Mumbai, Hyderabad and NCR to hold 70-75% of overall installed capacity

Mumbai, Hyderabad and the National Capital Region (NCR) will account for 70-75 per cent of the installed DC capacity

The commercial vehicle industry volume is expected to grow in the range of 7-10 per cent in the next financial year, rating agency Icra said on Tuesday. The volume growth would be on account of government infrastructure spending, replacement demand, back-to-school and office scenarios and e-commerce expansion, it noted. The growth will, however, moderate from 24-26 per cent in the current financial year, it added. Icra noted that the growth trends were visible in third quarter of the current fiscal, with wholesale dispatches reporting a growth of 16 per cent on a year-on-year basis, supported by replacement demand, improvement in the macroeconomic environment, and healthy traction in the underlying industries such as steel, cement, mining, automobiles, and e-commerce. Freight rates continued to hold up, which, coupled with healthy freight availability, is supporting fleet operator viability, it noted. The growth trends continued to be broad-based across all the three sub-segments

Credit rating agency Icra on Monday said the inflation-linked toll hike should be relatively modest at 2-5 per cent in FY24 as compared to 8.7-14.6 per cent last fiscal

A day after the Reserve Bank delivered another rate hike, a domestic ratings agency on Thursday said the increases will not impact collection efficiencies for non-bank lenders. This is so primarily because of the collaterals given by borrowers and the priority they accord to repayments, Icra Ratings said. The RBI has hiked rates in five consecutive policy reviews since May 2022 in order to curb inflation, which has led to an overall jump in the interest rates in the system. The agency said typically housing loans and loans against property pools carry interest rate risks. "... the continuation of rate hikes will not have a significant bearing on the collection efficiencies given the association of the borrower with the underlying collateral (residential properties) and the priority given by borrowers to repay such loans," it said. The agency added that the collection efficiency is expected to remain robust on the back of strong outlook for majority of the sectors though impact of

Domestic air passenger traffic touched 1.25 crore in January this year, an increase of 96 per cent compared to the year-ago period, according to rating agency Icra. However, it said the traffic remained around 2 per cent lower compared to the pre-Covid levels -- January 2020. The traffic stood at 64 lakh in January last year. Icra is maintaining a negative outlook on the Indian aviation industry, reflecting the view that the financial performance of Indian airlines is likely to remain under pressure in the near term, even though the recovery in domestic passenger traffic has been healthy. While a meaningful improvement in passenger traffic is expected in FY2023, the pace of recovery in the industry earnings will be gradual, it said on Wednesday. Icra noted that the net loss in FY2023 is expected to be notably lower compared to Rs 235 billion (RS 23,500 crore) net loss in FY2022, primarily due to recovery in passenger traffic, fare hikes and lower interest burden. In January this y