Indian infra firms’ profitability below 2019 levels till 2022: Moody’s

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May 29, 2021 1:29 AM

In a report titled Asia-Pacific (APAC) Project and Infrastructure Finance Chartbook 2021, Moody’s said that India has the most negative outlooks, accounting for 67% of the firms rated with a negative outlook in APAC.

Somewhat slower growth due to the second wave and higher fiscal deficits will result in a higher debt burden.Somewhat slower growth due to the second wave and higher fiscal deficits will result in a higher debt burden.

The Ebitda margin — an indicator of profitability — for Indian infrastructure companies rated by Moody’s have come down from 2019 levels in 2020, and they will remain flat till 2022, the rating agency said.

In a report titled Asia-Pacific (APAC) Project and Infrastructure Finance Chartbook 2021, Moody’s said that India has the most negative outlooks, accounting for 67% of the firms rated with a negative outlook in APAC. The study comprised 224 companies across 14 countries in APAC region, including 30 from India. As many as 23 Indian companies tracked in the report belong to the thermal power, renewable energy, electricity transmission and gas sectors.

Reflecting the negative outlook for the country’s sovereign rating, the outlook for all Indian investment grade companies is negative. Most other countries in the report have less than 20% companies with a negative outlook. Overall, 14% of rated companies have a negative outlook, with India having the highest proportion of 67%. However, the revenue of the 30 rated Indian companies will maintain a stable growth in 2021 and 2022, Moody’s said. The leverage level (ratio between fund from operations and debt) will weaken the most for gas companies in India and Indonesia compared with 2019 levels, as they are impacted the most by coronavirus disruptions, the report said.

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