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Fibre2Fashion
09-06-2025
- Business
- Fibre2Fashion
Indian firms resilient to US tariff pressures: Moody's & ICRA
Moody's-rated Indian non-financial corporates are largely shielded from US import tariffs, owing to their domestic market orientation and minimal export reliance, as per Moody's Ratings. Most Indian non-financial corporates are shielded from US tariffs due to domestic focus, according to Moody's and ICRA. Textiles may gain from the Indiaâ€'UK FTA, while capex is expected to reach $50 billion annually over two years. GDP growth is forecast at 6.3 per cent in FY25. Despite geopolitical risks and sector-specific challenges, corporate balance sheets remain strong and well-positioned. The Indian textile sector is expected to gain a competitive edge over China, buoyed by the recent India–UK Free Trade Agreement. Continued government focus on boosting private consumption, expanding manufacturing capacity, and ramping up infrastructure spending is expected to offset weakening global demand, Moody's Ratings and its Indian affiliate ICRA said in a release. 'Shifts in global supply chains coupled with the Indian government's efforts to increase local production will benefit domestic manufacturing. However, challenges such as the inadequacy of skilled labour, evolving logistics infrastructure and complex land and labour laws in the country could constrain the growth of India's manufacturing sector', said Vikash Halan, managing director at Moody's Ratings. Moody's is expecting these companies would invest approximately $50 billion annually in capital expenditure over the next two years, largely funded through internal accruals. As a result, average leverage levels, measured by debt/EBITDA, are projected to stay close to 3.0x. Meanwhile, ICRA has noted that Indian corporates are generally well-positioned to weather tariff uncertainties and geopolitical tensions. However, sectoral vulnerabilities persist. Geopolitical risks, especially tensions with Pakistan, may temporarily impact the travel and hospitality sectors. Yet, India's overall exposure to such risks is seen as moderate. ICRA has forecast India's GDP to grow by 6.3 per cent in fiscal 2025 (FY25) and 6.2 per cent in fiscal 2026 (FY26). Manufacturing momentum is accelerating under the Production-Linked Incentive (PLI) scheme. 'Urban consumption, muted in FY25, is expected to recover in FY26, supported by income tax relief, further rate cuts, and easing food inflation,' said K Ravichandran, EVP and chief rating officer, ICRA Ltd. India's corporate sector has also seen significant deleveraging, with debt/OPBITDA improving to 2.1x as of March 2025, from 3.2x in March 2019. In the financial sector, despite some asset quality concerns in unsecured lending and microfinance, both bank and NBFC balance sheets remain stable and capable of supporting credit growth, contingent on liquidity conditions. Fibre2Fashion News Desk (HU)
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Business Standard
04-06-2025
- Automotive
- Business Standard
India Inc resilient to tariffs, to invest $50 bn despite global headwinds
Indian enterprises are well positioned to handle the impact of tariffs and geopolitical tensions, Moody's Investors Service and its local arm Icra Ratings said on Wednesday. India Inc, however, will be "measured" in making investment decisions in the new fiscal because of the external headwinds, they said. "Indian non-financial companies are not directly affected by US import tariffs due to their focus on domestic consumption and low dependence on exports," a statement from Moody's said. It further noted that government initiatives to boost private consumption, expand manufacturing capacity and increase infrastructure spending will help offset the weakening outlook for global demand. "Private capex to remain measured amid external headwinds," it said. Indian corporates will continue investing in new capacity to cater to the sustained growth in domestic consumption, and Moody's estimated that non-financial companies rated by it will spend around USD 50 billion annually in capital spending over the next two years. It said most companies will spend from internal accruals, and the average portfolio leverage will continue to remain at 3 times the operating profit. Moody's Ratings managing director Vikash Halan said India's manufacturing growth will be constrained by challenges such as inadequacy of skilled labor, evolving logistics infrastructure and complex land and labor laws. Select auto parts categories, cut and polished diamonds, and seafood exports have notable exposure to the US market and may face headwinds from demand moderation or rising competition, it said, adding that the textiles sector is expected to benefit from its comparative advantage over China. Geopolitical tensions, particularly the India-Pakistan conflict, may weigh on near-term demand for travel and hospitality services. Nonetheless, India's overall exposure to these risks remains moderate, it said. Icra's chief rating officer K Ravichandran said after being muted in FY25, urban consumption is expected to recover in FY26 supported by income tax relief, further rate cuts, and easing food inflation, and the same will benefit automobiles, consumer goods, and services sectors. Meanwhile, on the infrastructure creation front, Icra forecasted a slowdown in road construction activity in the near-term, whereas other segments like ports and data centers will continue to witness significant investments, benefiting from solid government support, healthy capital outlays and a large pipeline of projects. The rating agencies said the country needs massive investments to meet its 2070 net-zero pledge, explaining that the country is grappling with the trilemma of energy security, affordability and transition. Over the next decade, these investments are projected to constitute 2 per cent of real GDP for the electricity value chain, encompassing power generation, storage, transmission and distribution, it said. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Time of India
04-06-2025
- Business
- Time of India
'India Inc well positioned to handle tariff, geopolitical challenges; capex to be measured'
Indian enterprises are well positioned to handle the impact of tariffs and geopolitical tensions, Moody's Investors Service and its local arm ICRA Ratings said on Wednesday. India Inc , however, will be "measured" in making investment decisions in the new fiscal because of the external headwinds, they said. "Indian non-financial companies are not directly affected by US import tariffs due to their focus on domestic consumption and low dependence on exports," a statement from Moody's said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The price of dental implants may surprise you Dental Implants | Search Ads Search Now It further noted that government initiatives to boost private consumption, expand manufacturing capacity and increase infrastructure spending will help offset the weakening outlook for global demand. "Private capex to remain measured amid external headwinds," it said. Live Events Indian corporates will continue investing in new capacity to cater to the sustained growth in domestic consumption, and Moody's estimated that non-financial companies rated by it will spend around USD 50 billion annually in capital spending over the next two years. It said most companies will spend from internal accruals, and the average portfolio leverage will continue to remain at 3 times the operating profit. Moody's Ratings managing director Vikash Halan said India's manufacturing growth will be constrained by challenges such as inadequacy of skilled labour, evolving logistics infrastructure and complex land and labour laws. Select auto parts categories, cut and polished diamonds, and seafood exports have notable exposure to the US market and may face headwinds from demand moderation or rising competition, it said, adding that the textiles sector is expected to benefit from its comparative advantage over China. Geopolitical tensions, particularly the India-Pakistan conflict, may weigh on near-term demand for travel and hospitality services. Nonetheless, India's overall exposure to these risks remains moderate, it said. ICRA's chief rating officer K Ravichandran said after being muted in FY25, urban consumption is expected to recover in FY26 supported by income tax relief, further rate cuts, and easing food inflation, and the same will benefit automobiles, consumer goods, and services sectors. Meanwhile, on the infrastructure creation front, ICRA forecasted a slowdown in road construction activity in the near-term, whereas other segments like ports and data centres will continue to witness significant investments, benefiting from solid government support, healthy capital outlays and a large pipeline of projects. The rating agencies said the country needs massive investments to meet its 2070 net-zero pledge, explaining that the country is grappling with the trilemma of energy security, affordability and transition. Over the next decade, these investments are projected to constitute 2 per cent of real GDP for the electricity value chain, encompassing power generation, storage, transmission and distribution, it said.
