At the end of last fiscal (April 2025-March 2026), Ind-Ra had indicated that the West Asia conflict would test the balance sheet strength that corporate India had built since FY22. The conflict proved to be one of the most significant tests of corporate credit profiles since the pandemic.
“The corporate credit profile continued to show resilience through 1HFY27, with downward rating actions attributable to the conflict confined to a handful of issuers,” Ind-Ra, Senior Director, Head of Credit Policy Group, Arvind Rao said.
Upgrade and downgrade intensity both held close to FY26 levels as much of the shock was absorbed before it reached corporate cost structures.
Diversified crude sourcing secured supply, and the government and oil marketing companies bore the bulk of the price increase, passing on only a limited part to retail fuel prices.
During H1 FY27 (April-September), Ind-Ra upgraded the rating of 190 issuers and downgraded the rating of 63 issuers. The upgrade-to-downgrade (U/D) ratio was broadly stable at 3 in H1 FY27 (FY26: 3.1; H1 FY26: 3.3).
India Ratings and Research said a supportive domestic environment also helped companies withstand the shock. GST rationalisation and income tax relief sustained household purchasing power and helped contain inflation, even as other cost increases were passed on.Investment demand held up, led by government capex and private spending in power, telecom, oil & gas, and metals, with data centres and semiconductors emerging as new areas of investment.
Financing conditions remained conducive, with a well-capitalised banking system, and ample liquidity ensured funding was not a constraint.
Resultantly, revenue growth was strong, and profits, outside oil marketing companies, grew at a healthy pace, as per Ind-Ra’s corporate credit profile analysis.
During the first half of FY27, rating upgrades by Ind-Ra were largely broad based across the investment, consumption, and service sectors underpinned by supportive policy measures and resilient domestic demand.
Investment-linked sectors, including infrastructure, construction, and capital goods, recorded a high number of upgrades, supported by sustained capex. Consumption and services sectors such as automobiles, consumer durables, commercial realty, and healthcare benefited from the demand support noted earlier.
Downgrades were largely concentrated in sectors exposed to volatility in raw material prices and execution uncertainties associated with contract awards, such as auto components and construction materials, while some rating actions were driven by issuer-specific stress in sectors such as capital goods.