More Related Content Similar to State of Nation - CRISIL's new report (20) State of Nation - CRISIL's new report2. ©2013CRISILLtd.Allrightsreserved.
Wide coverage spanning more
than 70 sectors.
Strong on-the-ground inputs
through primary sourcing
from over 4000 contacts
Ability to leverage upon cross-
sectoral linkages
CRISIL’s unique analysis combining macro and micro
Sound macroeconomic
research and forecasting
capabilities
Team of economists with
decades of experience in
bridging economics and real
world
Comprehensive study of 2481
firms (rated ‘BBB-’ or higher)
accounting for
32% of banking credit to
corporates
82% of CRISIL-rated debt
Two out of three sectors
will experience lower
revenue growth
Demand slowdown, the biggest source of vulnerability,
impacts nearly a fourth of 2481 firms
Industry projected to
grow at 1% in 2013-14
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3. ©2013CRISILLtd.Allrightsreserved.
Agriculture bounty
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Boost for exports
Weak currency, pick up in advanced economies
IT-ITES, pharmaceuticals, textiles and leather likely to benefit
Helps in paring the trade and current account deficit
Forex vulnerability is the least of the stress factors
Impacts only 6% of the 2,481 firms analysed
A caveat is in order: the universe of CRISIL-rated firms does not include many of the major
debt-laden corporate groups
The Good
Timely, well-distributed monsoons
Farm GDP growth to accelerate to 4.5% from last year's 1.9%
Check food inflation
Boost rural consumption
Stimulate demand for tractors and two-wheelers
4. ©2013CRISILLtd.Allrightsreserved.
Heavy burden of oil subsidies and declining growth in tax revenues will lead to slippages
Fiscal deficit likely to bloat to 5.2% of GDP, higher than budgeted 4.8%
Inflation rising
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Surging crude oil prices and weaker rupee to push WPI inflation beyond 6%
Rate cuts by RBI difficult
Stress in leveraged sectors such as infrastructure and real estate
Services segment weak
Spill-over of slower industry growth due to increased linkages between industry and services
Services growth of 6.5% in 2013-14, compared to 10% in the last decade
Firms stretched for liquidity
Liquidity pressures are a source of stress for 16% of the 2,481 companies analysed.
Large firms are impacted more acutely (27% of firms with operating income > Rs. 1000 crores
affected)
The Bad
No scope for stimulus
5. ©2013CRISILLtd.Allrightsreserved.
Demand slowdown hurts the most
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Two out of three sectors will experience lower revenue growth
Vulnerability to demand slowdown remains the most important source of stress for 25% of
2481 firms analysed
Larger firms more challenged: higher indebtedness and stress on interest cover
Industrial growth stays anemic
Industry will grow at a two-decade low of 1%
Investment climate weak
Infrastructure, capital goods, real estate, automobiles and transport operators likely to be the
worst hit
Current account deficit (CAD) will keep rupee weak
Rupee could rebound to 60/$ by March 2014, as CAD declines to 3.9%,
Currency to remain significantly depreciated compared with last fiscal
– Upward pressure on inflation, fiscal deficit and input costs for corporates.
The Ugly
6. ©2013CRISILLtd.Allrightsreserved.
GDP growth at decadal low of 4.8%
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If India gets lucky, and agriculture growth surges 6%, overall GDP could be a much better 5.2%
This happened in 2010-11 when, after a good monsoon, it had rocketed to 7.9%
Economy will stay in an L-Shaped trajectory
Economy will stay in an L-Shaped trajectory through this fiscal unlike the V-shaped recovery
seen after the Lehman crisis in 2008
What does this add up to