Mumbai, Dec 14: Moody's Investors Service has a stable outlook for non-financial corporates in India (rated
Baa2 stable by Moody's), except for telecoms, which has a
negative outlook.
Moody's Indian affiliate ICRA has a stable
outlook on the passenger vehicle, construction, cement, and textiles
sectors, but a negative outlook on real estate.
"Our stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes, which along with new production capacity and stabilizing commodity prices will support EBITDA growth of 5%-6% over the next 12-18 months," says Laura Acres, Managing Director at Moody's Corporate Finance Group.
"Further simplification of the Goods and Services Tax (GST) and other structural reforms or improved commodity prices could result in higher EBITDA growth, and provide means for deleveraging for some corporates," adds Acres.
Moody's has a stable outlook for exploration and production companies, reflecting expectations of stable production volumes, low subsidy burdens and stable oil prices.
For refining & marketing, Moody's stable outlook is based on the consideration that capacity additions and higher refining margins will increase earnings, even as marketing margins stay stable. While high dividend payments remain a concern, Moody's says that if the GST net is widened to petroleum products, it would be a credit
positive for the sector.
Moody's maintains a stable outlook for base metals with improved fundamentals and supply deficits in certain metals supporting stable prices over the next 12-18 months. Moody's expects base metal pricing premiums to narrow, although higher production from capacity additions and cost rationalization measures will drive earnings
expansion. Moody's also expects India's steel consumption to grow in the mid-single digits over the next 12-18 months, lower than India's GDP growth of 7.6%, supporting a stable outlook. Consolidation will also rise in the steel sector.
Moody's stable outlook on IT services incorporates the expectation that Indian companies will remain in the forefront in offering IT services to the Western economies, weighed against some of the global challenges, especially in terms of H1B visas and the fast-pace of technology change that will require investments or
acquisitions. UNI
"Our stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes, which along with new production capacity and stabilizing commodity prices will support EBITDA growth of 5%-6% over the next 12-18 months," says Laura Acres, Managing Director at Moody's Corporate Finance Group.
"Further simplification of the Goods and Services Tax (GST) and other structural reforms or improved commodity prices could result in higher EBITDA growth, and provide means for deleveraging for some corporates," adds Acres.
Moody's has a stable outlook for exploration and production companies, reflecting expectations of stable production volumes, low subsidy burdens and stable oil prices.
For refining & marketing, Moody's stable outlook is based on the consideration that capacity additions and higher refining margins will increase earnings, even as marketing margins stay stable. While high dividend payments remain a concern, Moody's says that if the GST net is widened to petroleum products, it would be a credit
positive for the sector.
Moody's maintains a stable outlook for base metals with improved fundamentals and supply deficits in certain metals supporting stable prices over the next 12-18 months. Moody's expects base metal pricing premiums to narrow, although higher production from capacity additions and cost rationalization measures will drive earnings
expansion. Moody's also expects India's steel consumption to grow in the mid-single digits over the next 12-18 months, lower than India's GDP growth of 7.6%, supporting a stable outlook. Consolidation will also rise in the steel sector.
Moody's stable outlook on IT services incorporates the expectation that Indian companies will remain in the forefront in offering IT services to the Western economies, weighed against some of the global challenges, especially in terms of H1B visas and the fast-pace of technology change that will require investments or
acquisitions. UNI
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