Infrastructure and power sector expected to attract funding in H2FY27: Brickwork Ratings
According to Brickwork Ratings (BWR), infrastructure and power are expected to attract funding in the second half of FY27, supported by project execution and timely payments. Commercial real estate is likely to drive funding flows in services, while gold loans and loans against property will support non-banking financial company (NBFC) lending. However, small NBFCs with significant microfinance exposure remain stressed.
Public spending, steady domestic demand supported credit profile resilience
India Inc's credit profile remained resilient in H1FY27 despite elevated crude oil prices, deficient monsoon rainfall and tighter global monetary conditions. Data from major Indian rating agencies showed 2.7 upgrades for every downgrade during April-September 2026, compared with 2.4 a year earlier. Downgrades declined 11%, while upgrades remained steady.
“Infrastructure, power, capital goods, auto components and secondary steel led upgrades, supported by public spending and steady domestic demand. Textiles, ceramics, diamonds and specialty chemicals faced pressure from weak exports and competition from cheaper imports,” said K. H. Patnaik, Chief Ratings Officer, BWR.
BWR-rated companies recorded 3.3 upgrades for every downgrade, with upgrades accounting for 35% of rating reviews. Corporate debt relative to equity declined to approximately 0.7 times in FY25 from 1.1 times in FY20, providing companies with greater borrowing headroom.
“The lesson for companies is simple: a strong credit rating is now a funding asset,” added Patnaik, highlighting the importance of creditworthiness as financing conditions tighten.
Services credit growth driven by commercial real estate; weak rainfall hurt discretionary demand
Non-food bank credit grew 18.8% year-on-year in August 2026, compared with 10.2% a year earlier, while corporate bond fundraising declined 34% during April-June. During the same period, services credit grew 24.3%, with commercial real estate among the key drivers. In this segment, Hyderabad could benefit from its strongest-ever first half for office leasing.
Meanwhile, exporters face renewed US tariff risks, while rural and discretionary demand could weaken, particularly in southern India, where rainfall was 24% below normal.
“H1FY27 showed India Inc has the strength. H2FY27 will test how well it uses it,” cautioned Patnaik, underscoring the importance of strong balance sheets as financing costs rise.
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