"Soft consumption and weak services activity in India will constrain demand for freight transport by commercial vehicle operators, in turn, reducing operators' revenue and weakening their ability to repay loans," its analyst Dipanshu Rustagi said.
The agency said that most Indian auto ABS are backed by commercial vehicle loans, and past episodes of slowing economic growth such as during the 2012-14 financial years
It made it clear that ABS delinquencies have not "increased significantly" in the present slowdown.
However, slowdown, the performance of commercial vehicle loans backing ABS deals could deteriorate significantly if "economic conditions remain subdued for a prolonged period", Rastogi said.
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