Stable growth rate, interest rate cut in 2025 will help corporates credit
New Delhi| International credit rating agency Fitch Ratings said on Monday that due to India’s stable growth rate, the situation in the country’s banking sector will improve in the year 2025 and interest rates may be cut. For this reason, corporates may get loan assistance in the financial year 2026.
Fitch Ratings claims
Indian corporates are driven by income before interest, tax, depreciation and amortization. In such a situation, the credit matrix of Indian corporates is expected to improve in the financial year (from April 2025 to March 2026). However, due to geopolitical reasons, there is also a risk of downside risk due to fall of Indian rupee or adverse impact on exports, increase in energy prices. Fitch Ratings has released a report titled ‘India Corporate Credit Trends’. This report states that ‘We expect India’s stable GDP growth prospects, improved financial health of the banking sector and a possible interest rate cut in 2025 to benefit overall credit access for corporates in FY2026’
These sectors can benefit from expenditure on infrastructure
It is expected that the Reserve Bank of India may cut interest rates in 2025. Fitch says that, ‘We expect India’s GDP growth rate to be 6.5 percent during fiscal year 26 and spending on infrastructure will strengthen demand from cement, power, petroleum products, steel and engineering and construction (E&C) companies. Sales of oil and gas production and oil marketing companies (OMCs) may decline by single digits.
How the trend may be in other sectors
Fitch expects mid-single-digit sales growth for IT companies. This will be due to limited customer spending in major foreign markets, which will be affected by slow economic growth. Sales of auto suppliers may also remain slow to mid-single digit. The travel and tourism industry will continue to improve. Fitch said the revenue growth of telecom companies will be supported by tariff increases. The pharmaceutical sector will also continue to be helped by the helpful sector trend.
