As per Moody’s Investor Services, the earnings of most Indian companies are expected to grow next year as economic activity gathers pace post-lockdown and demand starts to recover following a sharp slump, supporting deleveraging. According to the analyst, financially strong companies will have decent access to funding, while speculative-grade issuers will face challenges.
Specifically, around 39 per cent of the total $16 billion of debt maturing through 2022 pertains to financially weaker, speculative-grade issuers, it said.
This underpins Moody's Investors Service's “stable” outlook for Indian corporates in 2021. Broad-based demand revival and a low base in 2020 will support strong gross domestic product (GDP) growth of 10.8 per cent in India in fiscal 2022 ending March 2022. It would follow a decline of around 10.6 per cent in fiscal 2021—the country's first contraction in four decades.
However, the overall recovery will remain fragile as new infections continue to grow, although at a slower rate.
