Despite challenges like rise in borrowing cost, sluggish exports and certain global events, rating agency ICRA has said domestic consumption demand, government's infrastructure spending and healthy balance sheets lent support to India Inc's credit profile in the 2023-24 fiscal. In the just-concluded fiscal year, ICRA upgraded two entities for every entity downgraded, in continuation of the upgrade momentum that had been set in motion in FY22. Aviation, hospitality, auto and auto components, and banks were the few sectors in 2023-24 where the rating upgrades were induced mostly by industry tailwinds.
The domestic rating agency said India Inc bore direct and the indirect effects of multiple challenges in FY24, including inflation, rise in borrowing costs, sub-par monsoon, supply-effects of the continued war between Russia and Ukraine, start of another conflict between Israel and Palestine, the Red Sea crisis, and sluggish exports. Yet, these did not feel heavier as domestic consumption demand across several sectors, government spending on public infrastructure, and healthy balance sheets lent support to the credit profiles of entities. It maintained a positive outlook for the hospitality sector for 2024-25. Sectors where industry headwinds played spoilsport in FY24 and may continue to do so in the near term include chemicals, cut and polished diamonds, and bulk tea. It said overall, as credit profiles continued to improve last year, the number of instances of defaults dipped to five in FY24, compared with 22 in FY23 and 42 in FY22.
The agency expects India's GDP to expand 6.5 per cent in the current fiscal year, lower than 7.6 per cent in the last year. The asset quality of banks and non-banking financial companies (NBFCs) has also been at its decadal best with the profitability and the capitalisation indicators expected to remain healthy in the near term. It noted the series of proactive actions taken by the regulators (RBI and Sebi) in the recent years would work to further strengthen the financial system and the capital markets. The key downside factors that could throw a spanner in the works to this radiant prognosis would be how the monsoon pan out this year and how the complicated geopolitical landscape evolves.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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