SME Times News Bureau | 23 Feb, 2019
Ratings agency India Ratings and Research (Ind-Ra) has maintained a
stable outlook on the auto sector, anticipating improving sales in the
sector during the next fiscal over expectations of better liquidity in
non-bank financial companies.
The 'stable' outlook comes despite subdued sales numbers in the last couple of months.
Society
of Indian Automobile Manufacturers (SIAM) data suggested a slowdown in
the sales of passenger vehicles in the domestic market which declined by
1.87 per cent on a year-on-year basis in January. The comparable figure
for December stood at 0.43 per cent.
India Ratings has
maintained a stable outlook on the auto sector for the upcoming fiscal
"on the expectation of moderate sales volume growth in the passenger
vehicle (PV) segment, high single-to-low double-digit growth in the
commercial vehicle (CV) segment and steady growth in the two-wheeler
(2W) segment on a year-on-year basis".
The rating firm sees an
improvement in the liquidity situation of non-bank financial companies,
thus it is likely to reflect in the funding availability. However, the
growth rate is likely to be moderate, it added.
Apart from
improved finance availability, increased construction activities and
industrial activities will continue to favour CV demand.
The
agency further said that credit ratings of most of the large players in
its sample are set to be unaffected in 2019-20 despite capital
expenditure plans in view of the ongoing regulatory changes, development
of an electric vehicle platform and continued new product launches.
