Indian corporates may see slowdown in revenue growth over 24 months: S&P Global Ratings

Global risks such as stability of commodity prices and demand from the US and China will have a greater influence on the fortunes of Indian companies than domestic demand in the next year or two, S&P said

Press Trust of India February 19, 2019 14:57:33 IST
Indian corporates may see slowdown in revenue growth over 24 months: S&P Global Ratings
  • S&P has come out with a report titled 'Indian Corporate 2019 Outlook - Time For Caution'

  • S&P said general elections this year may pose additional risks for Indian corporates

  • A change of administration may trigger expansionary government spending that pushes up borrowing costs or raises inflation, it said

New Delhi: S&P Global Ratings on Tuesday said rated Indian corporates are likely to see a slowdown in revenue growth over the next 12-24 months.

In a report titled 'Indian Corporate 2019 Outlook - Time For Caution', S&P said, "India's central government elections this year may pose additional risks for Indian corporates. A change of administration may trigger expansionary government spending that pushes up borrowing costs or raises inflation".

Indian corporates may see slowdown in revenue growth over 24 months SP Global Ratings

Representational image. Reuters.

Global risks such as stability of commodity prices and demand from the US and China will have a greater influence on the fortunes of Indian companies than domestic demand in the next year or two, it noted.

"Revenue growth at Indian companies that S&P Global Ratings rates are likely to slow down over the next 12-24 months," it said.

The revenue environment for rated corporates is facing increasing global risks such as China's slowdown, trade war escalation, or a disorderly Brexit.

"Indian corporate performances should remain stable, given low costs, capacity expansion, and benign input prices," S&P Global Ratings Credit Analyst Krishnakumar Somasundaram Vishwanathan said.

With the exception of telecom, growth in other sectors in India has been accompanied by margin stability, and we expect this trend to continue, he added.

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