Crisil Says India Inc Can Absorb 50-Basis-Point Rate Hike

Crisil says many Indian companies have strong enough finances to handle higher interest rates.

It estimates that a 25-basis-point rate increase would only slightly reduce their ability to cover interest payments.

Even with a 50-basis-point increase, that ability is expected to remain around five times interest costs.

Infrastructure businesses are expected to cope relatively well, helped by demand and other supports.

Commercial real estate could feel some pressure if rates rise by 50 basis points.

Crisil expects bank lending to keep growing in FY27, especially to small businesses and households.

It says banks are supported by strong capital and asset quality, but some newer loans will be watched.

Crisil also warns that global tensions, supply problems, high oil prices, inflation and bad weather could strain businesses and consumers.

Overall, it keeps its credit-quality outlook for FY27 stable.