India’s general elections this year may bring additional risks for Indian corporates, the report says.
In a report titled ‘Indian Corporate 2019 Outlook - Time For Caution’, S&P Global Ratings has forecast that rated Indian corporates may likely face a slowdown in revenue growth over the next 12-24 months, according to media reports.
India’s general elections this year may bring additional risks for Indian corporates, says the report. It cautions that a change of administration may trigger expansionary government spending that will push up borrowing costs or raises inflation.
IThe report notes that global risks such as stability of commodity prices and demand from the US and China will have a greater influence on the prospects of Indian companies than domestic demand in the next year or two.
“Revenue growth at Indian companies that S&P Global Ratings rates is likely to slow down over the next 12-24 months,” media reports quoted S&P.
There are increasing global risks such as China’s slowdown, trade war escalation, or a disorderly Brexit for the revenue environment of rated corporates.
“Indian corporate performances should remain stable, given low costs, capacity expansion, and benign input prices,” media reports quoted S&P Global Ratings Credit Analyst, Krishnakumar Somasundaram Vishwanathan.
Vishwanathan said that apart from telecom, growth in other sectors in India has been accompanied by margin stability, and S&P expects this trend to continue.
Source: Hindu BusinessLine Online