Credit rating of India Inc to shine: Moody’s

“GDP growth of 7.5 per cent, capacity additions and stabilising commodity prices will support Ebitda growth of 6-12 per cent over the next 1218 months,” Laura Acres, Managing Director of Moody’s Corporate Finance Group, said. 

Ebitda is earnings before interest, tax, depreciation and ammortisation. Noting that “the capex (capital expenditure) cycle for Indian corporates has peaked as projects near completion,” Acres said declining investments would also slow the pace of borrowing over the next 12-18 months. 

“Refinancing needs are manageable for most corporates in 2017, given their better access to the capital markets and large cash balances,” Acres said. By sector, Moody’s stable outlook for exploration and production firms reflects higher production volumes, low subsidy burdens and a recovery in oil prices, which will offset lower natural gas prices and higher royalty payments. “In refining and marketing segment, capacity additions will offset weaker refining margins, while marketing margins will remain stable,” the statement said. Indian telcos, however, face intense competition, which will pressure margins, but this should be offset by growth in data consumption, thus supporting Moody’s stable outlook for this sector.