Corporate India is expected to remain resilient even if the Reserve Bank of India raises interest rates by up to 50 basis points during the remainder of the calendar year, supported by stronger balance sheets and improving credit quality.
Mumbai, Sep 30 — India Inc is unlikely to face major stress even if the Reserve Bank of India delivers a rate hike of up to 50 basis points in the remaining months of the calendar year, according to Crisil Ratings.
The rating agency said corporate balance sheets remain structurally stronger, helping companies absorb higher borrowing costs. It also maintained a stable outlook on corporate credit performance despite geopolitical tensions and concerns over weak rainfall.
Crisil said its credit ratio — the number of upgrades compared with downgrades across a portfolio of around 7,200 companies — improved to 2.18 times in the first half of FY27 from 1.5 times in the second half of FY26.
The agency’s stress tests identified diamond polishing, specialty chemicals and polyester textiles as sectors that continue to face higher risks from geopolitical disruptions. Airlines, ceramics and flexible packaging, however, have seen their credit outlook improve to stable.
Crisil expects the banking system’s gross non-performing assets ratio to rise marginally to around 1.9-2% by the end of the fiscal year from 1.8% a year earlier. It also expects overall banking-system credit growth of up to 15.5%, led by stronger lending to small businesses and retail borrowers.
The agency said a weaker monsoon remains an important factor to monitor and could affect sectors such as tractors and microfinance, although it does not expect a major impact on overall rural demand.
Other rating agencies also reported improved corporate credit trends. India Ratings recorded 190 upgrades against 63 downgrades during April-September, while ICRA reported a credit ratio of 3.2 times. CareEdge Ratings said its credit ratio rose to 3.95 times, supported by 300 upgrades and 76 downgrades during the first half of FY27.
