Lockdown will impact India Inc's credit quality: Crisil

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

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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.