Lockdown will impact India Inc's credit quality: Crisil

Corporates’ credit ratio at three-year low in H2 of FY20, outlook negative in FY21

With the coronavirus pandemic impacting economic growth, rating agency Crisil on Thursday said the credit ratio for Indian companies fell to an over three-year low for the second-half of 2019-20 and gave a “negative” outlook for the current fiscal.

“In fiscal 2021, downgrades will continue to outnumber upgrades driven by economic impact of the Covid-19 pandemic,” it said, adding that over the near to medium term credit quality trends would be driven by the ability of companies to rebound from the near-standstill demand situation.

In the second-half of FY20, there were 469 rating down-grades as against 360 upgrades.

Credit ratio, or the number of companies upgraded to those downgraded, weakened to 0.77 in the second-half of the fiscal from 1.21 in the first-half.