Resilience in India's GDP growth, relatively lower exposure to the ongoing slowdown in overseas markets, adequate corporate balance sheets, and supportive industry conditions are likely to support a "stable or improving" outlook for Indian corporates this year, said Fitch Ratings.
After some weakness in the current financial year due to cost pressures, their margins are also likely to improve next financial year - 2023-24 (April-March).
Fitch expects India's GDP growth to moderate to 7 per cent in 2022-23 from an 8.7 per cent recovery in 2021-22 from the pandemic.
"A modest reliance on slowing overseas markets, coupled with consumption and investment recoveries, will support sustained GDP growth of between 6 per cent and 7 per cent over the next few years," the rating agency said in its report 'India Corporates: Sector Trends 2023'.
In specific, it said steady economic growth and higher capital expenditure by the states for setting up infrastructure will support sustained demand growth in the cement and steel sectors.
Besides, the pharmaceuticals sector also may see steady growth.
"We believe the production boost from easing supply chain constraints and healthy growth in the domestic market will help auto suppliers to counterbalance inflationary pressure on demand in overseas markets," said Fitch Ratings.
On the contrary, it sees weaker overseas demand to slow revenue growth in the IT services and chemicals sectors.
( With inputs from ANI )
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