INSUBCONTINENT EXCLUSIVE:
Mumbai: Leverage ratios for non financial Indian companies will improve slightly in the fiscal year ended March 2019 mainly because of
note on Tuesday.
Aggregate debt to EBITDA (earnings before interest tax depreciation and amortisation) will decline slightly to 2.4 times in
fiscal 2019 from 2.5 times a year earlier helped by a growth in earnings.
"The revenue and EBITDA of non-financial corporates that we rate
in India should grow 10% and 8%, respectively, for fiscal 2019 (in the fiscal year ending March 2019) from a high base," said Laura Acres,
managing director at Moody's.
However, leverage for the telecommunications sector's will remain elevated on relentless competition, which
will in turn hurt profitability even as cash flow generation is constrained because of continued capital spending.
For companies in the
metals and mining sectors leverage will increase as these entities borrow more to fund capital spending and acquisitions, the US based
agency said.
Acquisitions and capital spending financed by debt will cause the debt levels of Moody's-rated companies to rise by 5% in
regulations and trade tariffs globally will strain export-oriented sectors such as IT services and auto, but the weakening rupee will
somewhat cushion this impact
Increasing compliance with environmental, social and governance regulation could also keep business costs high.
