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Amid broad based recovery and improved balance sheets, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained an overall stable rating outlook for large corporates for H2FY24. Of the rated portfolio, 82% has a stable outlook as on October 31, 2023, unchanged year on year.

As per the report, sectors like commodity chemicals, construction, textiles and tier-2 realty players remain vulnerable to a slowdown in growth and elevated costs, while road EPCs are seeing pockets of liquidity stress. The agency further noted that the recent geopolitical developments would remain key monitorable from both demand impact and commodity price perspective.  The agency also noted that household leverage has crept up and government deficits from counterparty perspective also remain fairly elevated.

Meanwhile, the agency, over the course of the past eight months, upgraded companies in the automobile, capital goods and tier-1 realty sectors on the back of strong order book in the domestic market and abating concerns on supply chain disruptions. The agency has taken negative rating actions on companies in sectors such as construction, pharmaceutical and cement, to reflect their deteriorating performance.