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New Delhi’s economic recovery is expected to gain ground in the second half of FY22, India Ratings and Research (Ind-Ra) said.

As a result, the rating agency expects the economic recovery to accelerate thanks to the mitigation of the impact of the Covid-19 pandemic as well as favorable financing and external demand conditions.

Therefore, he maintained an “improvement outlook” on domestic companies for the second half of FY22.

“Entities with a strong market share and a healthy balance sheet will continue to post strong earnings, although the margin may moderate. However, sectors that consume raw materials will face challenges in fully passing on the prices of commodities. inputs, ”the agency said.

In addition, he said most sectors will continue to experience increased demand after the second wave of Covid because they were better prepared than during the first wave.

“The fiscal and monetary measures have supported economic activities by maintaining adequate liquidity. Entities have learned to make rapid structural changes after the first wave of Covid and are now in a better position to face challenges if subsequent waves of Covid appear. “

In addition, the rating agency expects the “Production Incentive” (PLI) program in the steel sector in particular to lead to significant investment announcements from large and large companies. small steel companies.

Regarding commodity price volatility, he observed that since the second wave, especially during T2FY22, risk appetite in the system has reasonably improved.

“This is largely due to strong corporate performance, a dynamic external situation and ultra-relaxed and sustained monetary policy conditions. Ind-Ra expects financing conditions to remain favorable in S2FY22 , supported by easy monetary conditions, “he said.

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