India Inc seems to be shrugging off the impact of the Covid-19 pandemic with credit ratings agencies reporting improvement in credit ratio and corporate credit profile.

Crisil Ratings saw its credit ratio increase further in the first half of fiscal 2022, with 488 upgrades and 165 downgrades, reflecting a sharp and sustained recovery in demand despite the intense second wave of Covid-19 infections.

Positive outlook

This was the second consecutive rise in the credit ratio, at 2.96 times. It had risen to 1.33 times in the second half of last fiscal from 0.54 time in the previous half. “The outlook for India Inc’s credit quality remains ‘positive’,” it said in a statement on Friday.

Gurpreet Chhatwal, Managing Director, Crisil Ratings, “A sustained recovery in domestic demand, government impetus to infrastructure spending, and export growth, spurred by a buoyant global economy as well as the ‘China plus one’ sourcing strategy of global players, have led to a strong rebound in business risk profiles of India Inc, thereby driving the increase in upgrades.”

Also read: S&P Global Ratings sees signs of strong rebound in economy after second wave

According to India Ratings, corporate credit profile has posted its best performance in over half a decade during in the first half of the fiscal year. “Positive rating actions were seen, despite the devastating second Covid wave during this period,” it said, adding that 2021-22 is promising to be a year of recovery.

India Ratings and Research upgraded the ratings of 150 issuers, while downgrading ratings of only 49 issuers during this period. This is in stark contrast to the trend witnessed in the past two years, when downgrades had far exceeded upgrades.

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