Conditions will improve for corporates in 2021: Moody's
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)