Archive · 4 Oct 2026
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.
Crisil says Indian companies can absorb a rate increase of up to 50 basis points, supported by strong balance sheets.
Its analysis estimates median interest coverage at about 5.1 times after a 25-basis-point hike and 5.0 times after a 50-basis-point hike.
Infrastructure is expected to remain broadly resilient, though commercial real estate could face moderate debt-service pressure under the larger increase.
Crisil forecasts bank credit growth of 14.5–15.5% in FY27, led in part by MSME and retail lending.
Crisil retains a stable FY27 credit-quality outlook while monitoring geopolitical, supply-chain, inflation, crude-price and weather-related risks.
- Who
- Crisil assessed the effect of potential rate increases on Indian companies, infrastructure sectors and banks.
- What
- It says companies can broadly absorb a rate hike of up to 50 basis points and retained a stable credit-quality outlook for FY27.
- When
- The outlook and credit-growth forecast concern FY27; no publication date is stated.
- Where
- India.
- Why
- Strong corporate balance sheets, financial-sector resilience and government capital expenditure are among the supports cited.
- Rate-hike scenarios
- 25 basis points and 50 basis points
- Interest coverage after 25-basis-point hike
- Around 5.1 times
- Interest coverage after 50-basis-point hike
- Around 5.0 times
- Expected bank credit growth
- 14.5–15.5% in FY27
- Credit-quality outlook
- Stable for FY27
- Potential pressure points
- Geopolitical tensions, supply-chain disruptions, elevated crude prices, inflation and weather-related stress