MUMBAI: A Positive Shift in Credit Ratings

In an encouraging trend for the economy, credit rating upgrades have significantly outpaced downgrades in FY25. Although the pace has seen a slight slowdown compared to FY24, the overall direction remains positive. ICRA, a leading credit rating agency, upgraded 301 entities while downgrading 150, marking a credit ratio of 2.0x, a decrease from the previous high of 3.0x in FY22.

Industry Insights and Future Outlook

CareEdge and Crisil, other major players in the credit rating sector, reported ratios of 2.35x and 2.64x in H2, respectively. These figures indicate a robust health of corporate balance sheets, albeit with some caution due to global economic uncertainties. ICRA remains optimistic, pointing to factors such as tax relief, lower food inflation, policy rate cuts, and improved credit availability as key drivers behind this positive trend. However, challenges like weak urban demand and global risks remain concerns.

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