New Delhi,apr 1
India Inc. has emerged in a strong financial position as it braces for potential global uncertainties, with its balance sheets showing resilience despite challenging economic conditions. According to ICRA, FY2025 marked the fourth consecutive year of credit profile improvements, with the credit ratings of 301 entities being upgraded compared to 150 downgrades, maintaining a healthy credit ratio of 2.0x.This trend highlights the growing financial strength of Indian corporates, which have benefitted from an extended period of deleveraging and consistent profit growth.Commenting on the overall developments, K. Ravichandran, Executive Vice President & Chief Rating Officer, ICRA, said, “India Inc. has experienced an extended period of credit profile improvement, much of it due to strengthening balance sheets. Over the past decade, the aggregate operating profits of around 6,000 listed and unlisted entities analysed by us have grown at a CAGR of 12 per cent, while their total debt has increased by only 4 per cent.”Despite global challenges, including commodity price fluctuations, inflation, and interest rate volatility, India’s corporate sector has been able to navigate these pressures with greater financial stability, the credit rating agency added. “From a credit perspective, this enhanced the ability of corporate India to bear the cyclical challenges of recent periods posed by commodity price inflation, rising interest rates, and subdued demand. Apart from this general trend, a notable trend in the power, road, and realty sectors has been the increase in the proportion of upgrades due to reduced project risk, sometimes alongside debt refinancing at lower borrowing costs,” Ravichandran added.
