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Conditions will improve for corporates in 2021: Moody's

The overall recovery will remain fragile as new infections continue to grow - although at a slower rate - and therefore new lockdowns cannot be ruled out, which would hinder consumer demand and recovery

GDP to grow at 9.3 pc in FY22
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GDP to grow at 9.3 pc in FY22

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As economic activity gathers pace post-lockdown

New Delhi: Conditions will improve for Indian corporates in 2021, as economic activity gathers pace post-lockdown, Moody's Investors Service said on Wednesday.

In its 2021 outlook for rated Indian non-financial corporates, Moody's cited earnings growth on the back of widespread demand revival across sectors as the reason for giving a 'stable outlook' for Indian corporates in 2021.

"Broad-based demand revival and a low base in 2020 will support strong GDP growth of 10.8 per cent in India in fiscal 2022 ending March 2022, following a decline of around 10.6 per cent in fiscal 2021 - the country's first contraction in four decades," says Sweta Patodia, a Moody's Analyst.

"These improving business conditions will increase rated issuers' earnings, which we expect to return to pre-pandemic levels by the end of fiscal 2022. A combination of higher earnings and reduced capital spending will support deleveraging over the next 12-18 months." However, Moody's Investors Service said the overall recovery will remain fragile as new infections continue to grow - although at a slower rate - and therefore new lockdowns cannot be ruled out, which would hinder consumer demand and recovery. (IANS)

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