INDIA: The domestic passenger vehicle (PV) dealership industry will see revenue growth increase by ~100 basis points (bps) on-year, supported by a modest revival in sales volume even as realisations remain rangebound. While a tad better than last fiscal, growth has eased from the strong post-COVID-19 rebound seen up to fiscal 2024 as volume growth normalised.

The improvement in volume will benefit dealers in two ways. First, ancillary income will rise while promotions and discounts will reduce, lifting operating profitability to 3.2-3.4% after it fell 30-35 bps last fiscal. Second, elevated inventory levels from the last fiscal will moderate. That, and no major capex expected for showroom expansion, will reduce debt levels.

Consequently, the credit profiles of dealers will remain stable after moderating last fiscal from the healthy levels seen after the pandemic. A Crisil Ratings analysis of ~110 PV dealers, indicates as much.

Volume growth is pegged at 4-6% (chart 1 in annexure) this fiscal, with realisations expected to rise 3-4% backed by price increases by original equipment manufacturers (OEMs) and continuing tilt towards sports utility vehicles (SUVs). Consequently, dealers are expected to see high single-digit revenue growth with both the urban segment (constituting two-thirds of the annual demand) and the rural segment growing in tandem.

Says Himank Sharma, Director, Crisil Ratings, “Increasing urban disposable incomes backed by revision in tax slabs, interest rate cuts and a benign inflation, and sustained popularity of SUVs, will fuel urban demand for PVs. In the rural segment, sales of small cars could see an uptick on expectations of a normal monsoon and improved farm incomes amid higher minimum support prices. Consequently, we see the industry growing at 7-9% this fiscal.”

Higher volumes will also lift ancillary revenues from sales of motor insurance and accessories. Also, services and spares revenues will benefit from the high PV sales seen from fiscals 2022 to 2024. All these are relatively higher-margin segments and will cumulatively contribute 11-13% of total revenues, compared with ~10% or lower during the past few fiscals.

With improved revenue visibility and a push towards high-margin businesses, discounts and promotions will be limited to the non-peak seasons instead of year-round seen last fiscal. This reduction in sales promotion costs should provide a 15-20 bps uptick to operating profit margins to 3.2-3.4% this fiscal.

Dealers saw their inventory rise to 50-55 days last fiscal from the normal 30-35 days as retail sales slowed and OEMs sent stock aggressively to push sales numbers. This fiscal, while improved demand will result in inventory correction by 5- 10 days, it will remain higher than the average levels seen prior to fiscal 2024.

Says Ankita Gupta, Associate Director, Crisil Ratings, “With moderate reduction in inventory on-year and limited capital expenditure for new showrooms, debt levels for dealers are likely to decline marginally this fiscal over last. Gearing should improve to 1.0-1.1 times by March 2026 from the peak of 1.2 times seen as of March 2025. Interest coverage is expected to improve to 3.0-3.2 times from 2.9 times last fiscal. Consequently, credit profiles will be stable over the medium term.”

In the road ahead, recovery in retail sales volume, extent of further inventory push by OEMs and improvement in both urban and rural demand will bear watching.

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INDIA: CRISIL upgraded its rating on Vedanta’s long-term bank facilities and debt instruments to ‘AA’ from ‘AA-’ while reaffirming the short-term rating at A1+.

“The rating upgrade factors the expected material improvement in the consolidated operating profitability (earnings before interest, tax, depreciation, and amortization [Ebitda]) of Vedanta along with improved capital structure with a reduction in debt and leverage to below rating thresholds,” CRISIL said in its rating rationale.

CRISIL has noted that Vedanta’s consolidated operating profitability (EBITDA, excluding brand and management fees to VRL) is expected to increase to more than Rs 45,000 crore in fiscal 2025, mainly supported by volume growth in aluminum, zinc international, and iron ore segments, improved cost efficiencies in zinc and aluminum and healthy metal prices. EBITDA is expected to improve further in fiscal 2026, with the expected completion of ongoing capital expenditure (capex) for capacity increase and operating efficiency improvement, especially in the aluminum business, it added.

This is the second upgrade for Vedanta by a major credit agency in the last three months. In September, ICRA upgraded Vedanta Limited’s long-term credit rating to AA from AA-, citing the company’s strengthened credit profile.

In its rating rationale, CRISIL has also factored in Vedanta’s moves to deleverage its balance sheet and improve financial flexibility. “The promoters and group management have been articulating about increased focus on deleveraging balance sheets at VRL as well as at operating levels. This commitment has been reflected in recent fundraising events such as QIP and OFS by Vedanta, and stake sale by VRL which have resulted in cumulative fundraising of USD 1.9 billion by the group during April-August 2024.” the rating agency said, while expecting Vedanta’s net debt to continue declining further after FY 2025 as well.

Vedanta’s ability to withstand cyclicality in the commodity business and lower cost of production are other important factors highlighted by the rating agency. “The Vedanta group operates across various businesses spanning zinc, lead, silver, aluminum, oil and gas, iron ore, power, and steel. The group is among the largest producers in all these segments, thus commanding a strong position in the domestic market. A well-diversified business risk profile cushions the group from commodity-specific risks and cyclicality.” CRISIL said. 

CRISIL Ratings has taken note of the admission of the proposed demerger of Vedanta businesses into separate listed companies to the National Company Law Tribunal (NCLT), increasing the likelihood of successful completion of the demerger.

Vedanta’s UK-based parent – Vedanta Resources Limited – also recently received rating upgrades from an international credit agency. US-based Moody’s upgraded Vedanta Resources Ltd.’s (VRL) corporate family rating to B2 from B3 and the rating on the company’s senior unsecured bonds to B3 from Caa1. Further, last month Fitch also published Vedanta Resources’ first-time “B-” Rating with a Positive outlook.

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“Safe Harbour rates for foreign mining companies selling raw diamonds in India will benefit the domestic diamond sector. 92% of the raw diamonds mined globally are polished in India. With this announcement, import prices for diamonds will reduce, which will have a spillover effect on polishers and exporters, reducing export and retail prices in tandem. This will likely push polishers’ volumes in an otherwise subdued export environment while supporting operating profitability.”

Aditya Jhaver, Director, CRISIL Ratings

“The reduction in basic customs duty on gold to 6% from 10% is expected to provide a fillip to gold jewellery sales, which have been tepid in the recent past because of high prices. This will drive up volumes for domestic gold jewellery retailers including during the festive and wedding seasons.”

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MUMBAI: In June, domestic G-sec yields are likely to be influenced by a range of factors, such as foreign portfolio investor (FPI) flows, crude oil price movements, the rupee-dollar equation, outcome of the US Federal Open Market Committee, (FOMC) domestic inflows into the debt market, and announcement of G-sec auctions, amongst others.

Three-month view

The 10-year G-sec yield is expected to react to FPI flows, crude prices, global interest rates, the CPI inflation print, rate decisions by the RBI MPC and FOMC, global cues, and liquidity concerns.

Framework for the outlook

CRISIL provides its outlook on key benchmark rates for different debt classes — 10-year G-secs, state development loans (SDLs), and corporate bonds (CBs) — based on statistical models and inputs from our in-house experts. We also incorporate our views on policy expectations, the macroeconomic outlook, key events (local and global), and market factors (liquidity and demand/supply).

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PUNE: Real estate developer Rohan Builders, announced that it continues to maintain its prestigious DA2+ Developer Grading from CRISIL for the 14^th consecutive year, placing it among the select few developers in India to accomplish this remarkable achievement. CRISIL Developer Grading not only considers financial parameters but also evaluates operational parameters including management capabilities, timely delivery, and sales & collections.

“At Rohan Builders, our vision extends far beyond the present. We are not just constructing buildings; we are laying the foundation for an organization that is built to last for decades to come. To achieve this, we have developed a robust risk management framework that has held us in good stead even in challenging economic periods such as the 2008 financial crisis, demonetization in 2016, and the COVID-19 pandemic. The stringent conditions to earn the CRISIL Grading requires strong corporate governance, project management, and execution capability, along with financial prudence. This further helps in ultimately delivering a great product to our customers in time and with quality,” said Suhas Lunkad, Chairman & Managing Director, Rohan Builders.

Rohan Builders’ real estate vertical has completed over 65 projects measuring over 15 million sq. ft. across Pune and Bengaluru. It has 7 ongoing projects measuring about 6 million sq. ft. under construction and 4 projects in the pipeline all of which are expected to be launched by Q2 of this year.

The residential real estate markets of Pune and Bengaluru, in which Rohan Builders operates, have been robust in terms of new launches and sales over the past few quarters. The latest real estate research report shows inventory levels at 8 and 7 months respectively in both these cities, the lowest in the past decade, indicating robust demand. The company expects this momentum to continue at least for the next 3-4 quarters.

Binaifer Jehani, Business Head, MI&A Assessments, CRISIL, said “The grading indicates that the developer has a ‘Very Good’ ability to execute real estate projects of specified quality within the stipulated time and to transfer a clean title. The real estate sector needs a distinct improvement in transparency to sustain the trust of buyers. Also, selecting the best property from among the host of projects that have RERA approval continues to be a challenge for customers. Objective benchmarking and third-party evaluations, along with self-regulation by developers, can address both these issues. This is where CRISIL’s Developer Grading comes in, providing a reliable benchmark for evaluating developers’ credentials. The CRISIL grading reflects operational and financial excellence, offering reassurance to stakeholders.”

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INDIA: The share of Indian airlines in international passenger traffic originating from, terminating in, or transitioning through India is seen surging 700 basis points (bps) to ~50% by fiscal 2028 from 43% in fiscal 2024.

The improvement would be driven by Indian airlines deploying additional aircraft and adding new routes in the international segment, as well as their inherent advantage of superior domestic connectivity compared with foreign carriers.

The business profiles of Indian carriers will strengthen as a result of their rising share in international traffic, which is more profitable than the domestic segment.

India’s international passenger traffic grew to around 70 million in fiscal 2024, from a low of 10 million in pandemic-hit fiscal 2021, to surpass the pre-pandemic level1. The share of Indian airlines, which was rising steadily earlier, picked up pace since the pandemic (see chart 1).

Says Manish Gupta, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings, “A noticeable shift in spending patterns has emerged after the pandemic, as evident in the increasing inclination of Indians towards international leisure travel. Increasing disposable incomes, easing visa requirements, growing number of airports and enhanced air travel connectivity are boosting international travel. The government’s focus on making India a hub for tourism is also expected to provide a fillip to inbound traffic. Thus, international passenger traffic is likely to clock a CAGR² of 10-11% over the next four fiscals, against a mere 5% CAGR in the four years³ prior to the pandemic.”

Indian airlines are looking to capture a large portion of the growth in international passenger traffic as it is typically more profitable due to higher yields and has less intense competition compared with domestic routes. They have added 55 new international routes over the past 15 months, taking their tally beyond 300⁴. These include direct flights originating from additional cities⁵ to popular long-haul destinations in the United States, Europe and Australia, effectively reducing flying time and eliminating layovers.

Indian airlines are also aiming to deploy additional aircraft on the short and medium-haul international routes and leveraging codeshare agreements with major global airlines to offer onward connectivity to passengers.

As such, Indian airlines have certain natural advantages in cornering a larger share of the country’s international traffic compared with foreign airlines. They have superior domestic connectivity than their overseas counterparts – which serve only select Indian cities – and can offer end-to-end international connectivity on a single ticket to travelers from Tier 2 and Tier 3 cities.

India’s geographic location also lends itself well to air connections between the EMEA⁶ and Asia Pacific regions, potentially positioning the country as a hub for international travel.

Says Ankit Kedia, Director, CRISIL Ratings, “To capitalize on the growth in international travel, Indian airlines are investing in widebody and long-range narrowbody aircraft for network expansion, adding new international routes and introducing long-haul non-stop flights to key destinations. Aided by the planned fleet addition and network expansion strategy, Indian airlines could log a CAGR of 14-15% in the international segment over the next four fiscals, taking their market share to 50%.”

• ¹ 67 million passengers in fiscal 2020
• ² Compound annual growth rate
• ³ Fiscals 2016-2020
• ⁴ As per the 2024 summer schedule of Indian airlines
• ⁵ 21 new city pairs covering long-haul destinations during Oct-Dec 2023 compared with Oct-Dec 2019
• ⁶ Europe, the Middle East and Africa

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INDIA: The Securities and Exchange Board of India (SEBI) has approved CRISIL ESG Ratings & Analytics Ltd (CRISIL ESG Ratings), a wholly owned subsidiary of CRISIL Ratings Ltd (CRL), as a Category 1 provider of environmental, social, and governance (ESG) ratings.

Says Amish Mehta, Managing Director and CEO, of CRISIL Ltd, “It is our stated aim to grow sustainably and we are excited to have a license that reinforces our stewardship of this space. The approval comes at an opportune time when ESG disclosures have been improving and there is increasing realization in the financial markets on the need for independent ESG ratings that will support decision-making for issuers and investors, and channel funds towards sustainable growth of the Indian economy.”

The approval follows SEBI notifications amending the SEBI (Credit Rating Agencies) Regulations, 1999 to include provisions on ESG Rating Providers (ERPs). According to, and to comply with, these notifications, CRISIL ESG Ratings was incorporated.

CRISIL is the pioneer of credit ratings in India and has steered many innovations in the space over the past 37 years.

CRISIL Ltd launched its ESG ‘scoring’ business in 2021 and gradually expanded coverage from 225 to ~1,000 companies across ~65 sectors. This business will now be transferred to CRISIL ESG Ratings.

Says Gurpreet Chhatwal, Managing Director, CRISIL Ratings, “The ESG scores, which will henceforth be called ‘ESG ratings’, have already found traction among market participants. These are based on a unique India-specific framework that factors nuances at the sectoral level while guided by global best practices. The process includes analysis of more than 500 unique data points across the environmental, social and governance aspects for each company.”

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INDIA: According to a report by CRISIL Market Intelligence and Analytics, India’s inflation based on the Consumer Price Index (CPI) eased to a three-month low of 5.1% in January from 5.7% in December, largely driven by lower food prices. However, the report highlights that a further drop in core inflation to 3.5%, a 50-month low, stole the limelight.

Despite easing in January, overall food inflation remains elevated. On the positive side, rabi sowing has picked up and exceeded last year’s level, which augurs well for food inflation going forward. The report predicts that CPI inflation will average 4.5% in fiscal 2025, compared to an estimated 5.5% this fiscal. Cooling domestic demand, assumption of a normal monsoon, along with a high base for food inflation should help moderate inflation next fiscal. A non-inflationary budget that focuses on asset-creation rather than direct cash support also bodes well for core inflation.

The Index of Industrial Production (IIP) increased to 3.8% on-year in December from 2.4% in November, driven by consumption and industrial sectors. Growth in manufacturing picked up (3.9% on-year in December vs 1.2% the previous month), while growth in electricity (1.2% vs 5.8%) and mining (5.1% vs 7.0%) slowed.

The report predicts that slowing growth in manufacturing and services will lead to GDP growth of 6.4%, on average, next fiscal compared with 7.3% this fiscal. Overall, the report suggests that India’s economy is showing signs of improvement, with easing inflation and an increase in industrial production.

CRISIL Market Intelligence and Analytics

• Inflation based on the Consumer Price Index (CPI) eased to a three-month low of 5.1% in January from 5.7% in December largely driven by lower food prices. However, a further drop in core inflation to 3.5% – a 50-month low – stole the limelight.
• Despite easing in January, overall food inflation remains elevated. On the positive side, rabi sowing has picked up and exceeded last year’s level, which augurs well for food inflation going forward.
• We expect CPI inflation to average 4.5% in fiscal 2025 vs an estimated 5.5% this fiscal. Cooling domestic demand, the assumption of a normal monsoon along with a high base for food inflation should help moderate inflation next fiscal. A non-inflationary budget that focuses on asset creation rather than direct cash support also bodes well for core inflation.
• The Index of Industrial Production (IIP) increased to 3.8% on-year in December from 2.4% in November driven by consumption and industrial sectors.
• Growth in manufacturing picked up (3.9% on-year in December vs 1.2% the previous month), while growth in electricity (1.2% vs 5.8%) and mining (5.1% vs 7.0%) slowed.
• We expect slowing growth in manufacturing and services to lead to GDP growth of 6.4%, on average, next fiscal compared with 7.3% this fiscal.

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INDIA: In a pioneering effort to understand the way urban Indian women plan, prioritize and manage their money, DBS Bank India, in partnership with CRISIL, has undertaken a comprehensive study entitled ‘Women and Finance’. The first of three reports was launched today, based on the survey that was designed to reveal the financial preferences of women, both salaried and self-employed, across various life stages. Over 800 women were surveyed across 10 cities in India on a wide range of behaviors, including their involvement in financial decision-making, goal setting, saving and investing patterns, and adoption of digital tools as well as their preferences for different banking products.

In the context of the stagnating rate of female participation in the workforce and a persistent gender pay gap, the insights from this study are pertinent for businesses, regulators, and financial institutions as well as a revelation when it comes to understanding the variations of Indian women’s relationship with their finances. The survey findings pointed to factors like age, income, marital status, presence of dependants, and home location as major influencers of the financial behavior of women.

Decision-making dynamics and evolution of goals

Whether it’s charting out their children’s educational paths or balancing multiple, competing financial goals, women are not bystanders, but are at the helm, shaping the future of their families. An encouraging 98% of salaried and self-employed Indian women actively participate in long-term family decision-making. The findings revealed that about 47% of them make independent financial decisions, a reflection of women’s growing financial autonomy. Age and affluence play a pivotal role in shaping these decisions. Women over 45 years old, with their wealth of experience, emerge as the leaders, with 65% making independent financial choices compared to 41% of those aged 25-35 years.

The report provides a fascinating glimpse into the growing empowerment of earning, metropolitan women. Across India, a woman’s primary long-term financial priority evolves with age. Buying/upgrading a home is priority number one for those between 25-35 years, while it evolves to children’s education for those in the 35-45 year category and to medical care for those above 45 years of age. Expectedly, retirement planning is seen entering the consideration set for the first time in the 35-45-year age cohort.

Prashant Joshi, Managing Director and Head of the Consumer Banking Group, at DBS Bank India, said “The insights from the survey highlight the importance of financial stability in the aspirations of independent female earners across India. Ownership of financial decision-making, diverse investment and borrowing choices, and growing adoption of digital channels are all evidence that the modern Indian woman is not just a participant, but a planner of her journey. More than 35% of our own DBS Treasures customer base are female and we have seen many inspiring examples of how women can take charge of their finances. The DBS Women and Finance study is a step forward in the much-needed movement to a more equitable financial playing field and it underlines our commitment to enabling all customers to ‘Live more, Bank less’.” 

Saving, borrowing, and investment behavior

Women earners in the metros tend to be risk-averse with 51% of their investments parked in fixed deposits (FD) and savings accounts, followed by 16% in gold, 15% in mutual funds, 10% in real estate, and just 7% in stocks. This tracks behaviors from DBS Bank India’s customer insights where 10% of female customers have an active fixed deposit, while just 5% of male customers have opened an FD.

The presence of dependents understandably plays a major role in women’s investment behavior. Specifically, 43% of married women with dependents conservatively allocate 10-29% of their income to investing, while in contrast, a quarter of married women without dependents choose to invest over half of their income. Regional variations lend greater depth to the insights. For example, Hyderabad and Mumbai lead the way in credit card usage, with 96% of women in Mumbai relying on credit cards, while only 63% of women in Kolkata use them. More significantly, the report revealed that half of the salaried women stated that they had never taken a loan. Among those who have borrowed, the majority opted for a home loan, which reflects the deep cultural importance associated with homeownership in India.

The study also deep-dived into women’s usage of different banking and payment channels. 33% of those in the 25-35 age bracket prefer to use UPI for online shopping, while only 22% above 45 years use UPI. This finding aligns with the customer profile of Digibank by DBS, the mobile-first, digital bank where more than 78% of the female user base is below 40 years of age. The report showed that UPI stands out as the preferred choice for urban women for a variety of payment needs: money transfers (38%), utility bills (34%), and e-commerce purchases (29%), signaling decreasing dependency on cash. Although regional nuances were stark in some cases with only 2% of women in Delhi opting for cash payments, while 43% of women from Kolkata favoured this option.

DBS has been a part of India’s journey since 1994, and it is the largest foreign bank in the country by branch presence with a physical footprint of 530 branches in 350 locations. With the study Women and Finance and its three-part report, DBS Bank India aims to gain a deeper appreciation of the evolving needs and aspirations of women in India to better support holistic financial management and growth.

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