Corporate credit profile continue to deteriorate
A recent report of India Ratings & Research (A Fitch group company) makes some very interesting observations about the corporate credit profile of India. The report highlights that corporate credit profile is deteriorating progressively and this trend is likely to persist in near term, implying that (a) the stress in the financial system may not ease materially in the near term and (b) the credit growth that is struggling at the multi year low levels may not see any significant improvement in the next few months at least. The key highlights of the report could be listed as below: Rating downgrades by India Ratings and Research (Ind-Ra) increased sharply in 9MFY20, with the number of upgrades reducing dramatically. Defaults were significantly higher at 4.9% of all issuers reviewed during this period, as compared to 2.9% last year. Utilities and capital goods industries together contributed to the most number of defaults at 31%. Rating changes for 9MFY20 wa...