India's resilient economic growth to boost demand of corporates: Fitch Ratings

Fitch Ratings expects that India's resilient economic growth will boost demand of the corporates. This follows the robust performance of the corporates in 2023 and will offset weakness from slowing growth in key overseas markets, the credit rating firm said in its latest report on 'India Corporates: Sector Trends 2024'.

Rising demand and easing input cost pressure should boost margins of the corporates in the next financial year ending March 2025 (FY25), Fitch said.

Fitch said that with strong domestic demand growth, it is expected that India will be among the world's fastest-growing countries, with resilient GDP growth of 6.5 per cent during the fiscal 2024-25.

This is despite a challenging global backdrop and the cumulative impact of the recent monetary tightening, it said.

Sectors like cement, electricity and petroleum products are expected to witness a strong demand with high-frequency data in 2023 sustained well above pre-Covid pandemic levels.

Fitch said that India's improving infrastructure will also boost steel demand. Slowing down in the US and the Eurozone is likely to moderate growth of the IT services, but a corresponding easing of employee attrition and wage pressure should underpin higher profitability and solid rating headroom at rated IT services companies.

Fitch further stated that rising domestic auto sales volume should drive revenues of the auto suppliers. Meanwhile, it added that travel and tourism conditions also improved in 2023.

Monthly passenger vehicle and retail sales continuing to rise year-on-year since March 2022, it noted.

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