Any potential tariffs on pharmaceutical imports into the US are unlikely to impact the credit profiles of Indian firms except for a short-term pricing blip, according to a report by India Ratings and Research (Ind-Ra). The report stated that the US generics market contributes around 35 per cent to the total revenue of the leading Indian pharma firms.
India Ratings & Research (Ind-Ra) has projected the aggregate fiscal deficit of states to rise to 3 per cent of gross domestic product (GDP) in 2026-27 (FY27), from an estimated 2.8 per cent in 2025-26 (FY26), citing higher revenue expenditure amid election-related pressures and scheme cost-sharing requirements.
As the potential threat of a steep 200 per cent tariff on pharmaceutical imports hangs in the air, analysts and industry insiders feel that focus on exports to non-US regions as well as domestic market will increase as a long-term trend. US President Donald Trump told CNBC's Squawk Box in the first week of August that planned tariffs on import of pharmaceutical products to the US could eventually reach up to 250 per cent.
After declining to a three-year low in FY24, the private sector investment is expected to fall further in the current financial year, India Ratings said in a research note.. The investments in the private sector are likely to plummet to below 11 per cent of the GDP in FY25, based on the trends from the latest national accounts data and company fillings, it noted.
Wholesale price inflation (WPI) softened to 0.13 per cent in September on easing in prices of food articles and manufactured items, government data showed on Tuesday. WPI-based inflation was 0.52 per cent in August and 1.91 per cent in September last year.
Retail inflation slipped to 1.54 per cent in September from 2.07 per cent in the preceding month mainly due to subdued prices of food items, including vegetables and pulses, according to government data released on Monday. The consumer price index (CPI) based inflation was 5.49 per cent in September 2024.
The RBI's monetary policy committee is expected cut benchmark interest rate by 25 basis points in its policy review meeting next month to push growth, India Ratings and Research (Ind-Ra) said on Thursday. "We expect the headline inflation in FY25 to cool off to 4.7 per cent. Monetary easing may be limited to 75 bps in FY26," Ind-Ra Chief Economist and Head Public Finance, Devendra Kumar Pant said.
India's top listed real estate developers reported steady growth in Q4FY25, supported by healthy pre-sales, even as earnings reflected signs of moderation amid elevated housing prices and subdued launches.
A fresh US executive order (EO) which seeks to bring down prices of prescription drugs in the country by up to 90 per cent -- on par with other developed nations -- will affect innovator companies, while sparing the Indian generic drug makers in the short term. US President Donald Trump signed the EO on Monday, directing the US Trade Representative and the Secretary of Commerce to act against foreign countries that "purposefully and unfairly undercut market prices", driving price hikes in the US.
Wholesale price inflation eased to 2.05 per cent in March, as against 2.38 per cent in February, government data showed on Tuesday. The wholesale price index (WPI) based inflation, however, rose year-on-year.
India Ratings on Thursday said that any broad-based or strong recovery in corporate capital expenditure was unlikely in the upcoming financial year 2026 (FY26) due to uncertainty of domestic and external demand. The uncertainty is adversely affecting the overall corporate sector capex. Interest rates on credit are not the primary deterrent to decisions about capital expenditure, said Soumyajit Niyogi, director, core analytical group, Ind-Ra, in a webinar on the credit market outlook.
States are on track of fiscal consolidation with their total borrowings reaching Rs 5 trillion till October, which is 60 per cent of the projected borrowings of Rs 8.38 trillion till December 2024, according to data from official sources. Government officials said the lower-than-projected borrowings by states were a sign of prudent fiscal management by them. States announce their borrowing plans every quarter.
Hotel companies, which have experienced substantial share price gains in the past six months, are not only expected to post robust revenue growth in the seasonally weak July-September quarter (second quarter, or Q2) of 2023-24 (FY24), with the trend continuing in the second half (H2) of FY24, but according to some analysts, they will also benefit from a structural uptrend in progress. To begin with, larger players in the listed hotel sector are expected to report strong growth in Q2 compared to the year-ago quarter. Led by higher demand from the business segment, the sector is expected to achieve a growth rate of 15-30 per cent.
Production of eight infrastructure sectors increased by 5.4 per cent in November against a 3.2 per cent growth in the same month last year on a better show by coal, fertiliser, steel, cement and electricity segments, according to the official data released on Friday. Crude oil, natural gas and refinery products, however, recorded negative growth in November this year. The production growth of eight key sectors slowed down to 0.9 per cent in October.
The output of eight core infrastructure sectors contracted to six-month low of 4.5 per cent in July against 9.9 per cent in the year-ago period, according to official data released on Wednesday. The output of these infrastructure sectors expanded by 13.2 per cent in June, 19.3 per cent in May, 9.5 per cent in April, 4.8 per cent in March, 5.9 per cent in February and 4 per cent in January. The production growth of eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- was 11.5 per cent in April-July this fiscal against 21.4 per cent a year ago.
Notwithstanding the fact that the country's pharmaceutical (pharma) pricing regulator has allowed a 12 per cent price increase for medicines listed under the National List of Essential Medicines (NLEM) in 2023, analysts and industry insiders predict that the overall domestic pharma industry will only witness a price hike of 5-6 per cent. This is attributed to higher competitive intensity in the market. Krishnakumar V, executive director and chief operating officer (CEO) of Eris Lifesciences, a domestic-focused pharma company, noted that the NLEM segment experienced growth suppression of around 150 basis points due to price reductions during the January to July period this year.
Retail inflation declined to a 25-month low of 4.25 per cent in May mainly on account of softening prices of food and fuel items, with experts saying that RBI is expected to hold interest rates steady in the current fiscal. This is the fourth straight month when retail inflation has declined and the third straight month of Consumer Price Index (CPI) based inflation remaining within the RBI's comfort zone of below 6 per cent. CPI-based inflation stood at 4.7 per cent in April and 7.04 per cent in May 2022.
The venue for Saturday's meeting was shifted at the last minute from the headquarters of the India Banks' Association in Cuffe Parade to avoid media glare.
Retailers in the food, grocery and fashion retail segments to be unaffected
Vaccinating all citizens above the age of 18 years against COVID-19 will cost Rs 67,193 crore, of which states together will incur Rs 46,323 crore, India Ratings and Research (Ind-Ra) said on Thursday. As the second wave of COVID-19 sweeps the country with alarming speed and severity, the government has announced a liberalised and accelerated Phase 3 strategy of COVID-19 vaccination. Under this scheme, all persons above 18 years of age will be eligible to get COVID-19 vaccine doses from May 1.
According to Ind-Ra's analysis, credit metrics of hotel companies have showed a downward trend since FY08.
More rate cut by RBI unlikely this fiscal, say Ind-Ra
The revised salaries of central government employees are likely to be paid from July 1, 2016.
It has been lowered to 'IND BBB+' from 'IND A-', besides placing the rating on 'Rating Watch Negative' (RWN).
Weakness of dollar in the overseas market also boosted the rupee value against the dollar.
India's growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries.
Average delinquency rate for close to 12 months seasoned loans was 9% during 2009.
Indian corporates might face higher borrowing cost in the overseas market in short-run due to the Greek debt crisis.
Government's push for Make in India which focuses on select 26 sectors and improving the 'ease of doing business' will aid the manufacturing/industrial growth.
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The basis of Ind-Ra's expectation of INR appreciation is based on economic developments in the last one to two months of this fiscal and the likely developments in the remaining months.
The retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale price index stayed in double-digits for the 10th month in a row, showed two sets of data released by the government on Monday. Retail inflation, the key input for the RBI while reviewing the repo rate every two months, soared during the month mainly because of a spike in certain food items. The previous high for retail inflation was 6.26 per cent in June 2021.
The revision in base year of India's national accounts will increase the size of the economy to Rs 111.7 trillion in FY14, India Ratings (Ind-Ra) said on Wednesday.
Not just mid- and small-sized firms, even big ones will either sell group companies or stakes in their listed entities to tide over crisis; more sell-offs seen in coming months.
State Bank of India has revised lending rates based on marginal cost of funds, a new methodology that will take effect from April 1.
Flush with liquidity, banks are eager to lend. And, therein lies the problem, warns Tamal Bandyopadhyay.
India Ratings principal economist Sunil Kumar Sinha said the Brexit is a mixed bag for the country.
The real estate sector might have been caught off guard by the second wave of the Covid-19 pandemic, but large listed developers like Godrej Properties and Prestige Estates Projects soldier on undeterred. They aim to have sales bookings of Rs 10,000 crore in the next few years.
Since most Indian firms have kept their forex exposure unhedged, credit profile of companies in the highly sensitive sectors such as oil & gas, metal & mining, airlines could weaken substantially, says Anup Roy.
Gold prices in the country may even dip to Rs 20,500 per ten grams.
Household indebtedness is higher in the southern states as compared to the other parts of the country, a report said on Tuesday. Citing the All India Debt and Investment Survey (AIDIS) data from 2013-2019, domestic agency India Ratings said household indebtedness both in rural and urban areas was higher in southern states than rest of India. In 2019, Telangana with 67.2 per cent had the highest proportion of its rural households indebted and Nagaland with 6.6 per cent had the lowest proportion of its rural households indebted.
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