In its report on non-financial corporates, Moody's said it expects to see the "strongest profit growth among corporates in India underpinned by sustained economic growth, capacity add-ons and higher commodity prices".
This projection for corporates is based on expectation of India clocking a GDP growth of 7.5 per cent. Also, the commissioning of new production capacities and stabilising commodity prices will support EBITDA growth of 6-12 per cent over the next 12 to 18 months, expects Moody's.
It said refinancing needs in 2017 will be manageable for most corporates, given their better access to capital markets and large cash balances.
Downside risk, the US-based agency said, with regard to telecom companies stems from intensifying competition as it could lead to lower earnings growth or increase in capex for some sectors. Besides, large debt-funded acquisitions or capacity additions that will result in weaker credit metrics could lead to downside.
Also, higher interest rates brought on by rising inflation and/or exchange-rate volatility, resulting in a tight funding environment could act as downside risk, Moody's said.
Moody's had last week affirmed India's sovereign rating at 'Baa3' with a positive outlook, saying it expects policymakers to continue reforms to achieve balanced growth and reduce the government's debt load.
The positive outlook denotes Moody's expectation that, over time, India's credit metrics will likely shift to levels consistent with a 'Baa2' rating, it had said.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.