Steel Update: July 2020

27 July 2020

The Covid-19 pandemic has crippled demand in major steel-consuming sectors and impacted steel production globally. However, as other countries struggled with their manufacturing, China continued to churn out more steel as government stimulus measures revived demand.

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Revised GDP growth projections for FY21

03 July 2020

GDP forecasts for FY21 are unique as they would be varying depending on the evolving situation and the assumptions being made on the recovery process in the country. This is so as the explanatory factors i.e. the extension of lockdown and the quantum of economic activity permitted is unknown and has to be assumed. In May we had projected a decline in GDP growth of 1.5-1.6% on the assumption that the lockdown would be ending by the month end and that the recovery process will be gradual and be calibrated across sectors with the second half being closer to normal.

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Covid Impact on India Inc.- Credit Perspective

30 June 2020

The general impact of COVID 19 on the economy including various sectors has been adverse as a rule with few exceptions. The overall prospects for the year do not look good; and while a negative top line GDP growth can be taken for granted, as a credit rating firm we are concerned on how our ratings get affected. The credit view hence of various sectors becomes important as at the end of the day, a partially functioning economy which would take an uneven amount of time across sectors to normalize would have a differentiated impact across the credit quality of industries.

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Extended Partial Guarantee Scheme: What does it offerto NBFC/HFC/MFI ?

10 June 2020

As a part of the Rs.20 lakh crore stimulus package, the cabinet extended the earlier partial credit guarantee (PCG) scheme. The earlier scheme operationalised post amendments in December 2019 in order to extend relief to NBFCs. The earlier PCG Scheme was offering sovereign guarantee of up to 10% of first loss to PSBs for purchasing pooled assets rated BBB+ or above worth up to Rs.100,000 crore, from financially sound NBFCs/ MFIs.

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Credit Policy Review – May 2020

26 May 2020

In less than 2 months and in an unscheduled monetary policy meeting, the RBI announced another fairly steep rate cut along with regulatory measures to further ease the financing conditions in the domestic economy which has been severely impacted by the shutdown in the last 2 months. Today’s policy announcement was the RBIs second monetary policy review for the fiscal year 2020-21.

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Central Government’s Economic Stimulus - Part 1

18 May 2020

The Prime Minister yesterday announced a Rs.20 lakh crores special economic package in relation to the Covid 19 crisis. This package is a combination of monetary and fiscal measures and includes some of the measures already announced by the RBI and the central government in the last two months.

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Negative crude Oil Price

25 April 2020

Crude oil price getting into the negative territory is hard to conceive but happened yesterday as the May contract due to be settled ended negative even as June contract retained its $ 20 plus level. The June contract expires on May 19 and is a better representation of the true oil market. Hence, this will get corrected, but the falling crude oil price is symptomatic of a deep malaise that has been brought out by the IMF i.e. recession. With overall growth expected to be negative demand for everything will be low if not drop which includes crude.

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Retail Inflation – March 2020 and Annual FY 20

15 April 2020

Retail headline inflation in March 2020 fell to a 4-month low of 5.9%, 0.7% lower from a month ago and 3.1% higher from corresponding month a year ago. Inflation for the month has been notably lower than CARE Ratings’ estimate of 6.5%. It is to be noted that on account of the nationwide lockdown following the spread of COVID-19, fieldwork for price collections had to be suspended and 66% of the price quotations were received while the price behaviour of the remaining price quotations were established based on internationally accepted methodologies.

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Industry-wise impact of Covid-19

06 April 2020

The epidemic Covid-19 continues to take toll on global and domestic activities and economy. The number of infected cases is escalating each day with the first few cases being reported in China (in December 2019) now been recorded in almost every nation on the globe.

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Relief Package To Address Pandemic

27 March 2020

In light of the Corona virus pandemic led economic disruptions, the Government earlier today announced a Rs.1.7 lakh crores relief package under the ‘Gareeb Kalyan Scheme’ which is to come into effect immediately (likely from 1 April’20). This is the second package announced in as many days. The first package mainly provided extensions in mandatory compliance and did not entail any expenditure outgo. The relief package announced today is targeted at the most vulnerable sections of the society and chiefly comprises of direct cash transfers limited to certain segments, welfare measures and measures to ensure food security to the poor in urban and rural areas including migrants workers for a period of 3 months.

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Industrial output: January 2020

18 March 2020

Industrial output for the month of January, 2020 rose to a 6-month high of 2%, higher than 1.6% growth registered in the corresponding month a year ago and a contraction of 0.3% in December, 2019. CARE Ratings’ had estimated IIP growth of 2.4% for the month. The overall growth in industrial production during the month can be attributed to low base effect amidst broad-based growth across all 3 categories of the IIP index.

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Retail Inflation – February 2020

18 March 2020

In February 2020, the retail inflation moderated to a 3 month low of 6.6%, 1% lower than 7.6% a month ago. However, for the 3rd successive month, the retail inflation remained above RBI’s upper band of inflation target (6%). Compared with comparable month a year ago, the retail inflation is 4% higher than the 2.6% inflation for February 2019.

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Analysis on the outcome of the (Extraordinary) OPEC+ meeting

11 March 2020

Pandemonium prevailed in the oil markets with the outbreak of the coronavirus (COVID-19) which shook the global economy as China cordoned off its economy from the world.

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India’s GDP Growth: Q3 2019-20 and 2nd AE FY20

29 February 2020

CSO has released GDP growth for Q3-FY20 and the 2nd advance estimate for FY20 and both the numbers manifest the slowdown in the Indian economy. India’s GDP grew by 4.7% in Q3-FY20, 0.9% lower than the corresponding quarter a year ago. There has been an upward revision in the quarterly growth of both Q1-FY20 and Q2-FY20 by 60 bps with growth estimated at 5.6% and 5.1% for the respective quarters. GVA growth for Q3-FY20 has been estimated at 4.5%, lower by 1.1% than corresponding quarter a year ago. The GDP growth estimate for Q3-FY20 has been marginally higher than CARE Ratings’ estimate of 4.5%. The 2nd AE of GDP growth for FY20 has been estimated at 5%, which is the lowest since the commencement of the 2011-12 series and is estimated to be almost 1.1% lower from a year ago.

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Monetary Policy Review: February 2020

13 February 2020

Meeting the market’s expectations and in line with CARE Ratings’ expectations, the Monetary Policy Committee (MPC) maintained status quo in its sixth bi-monthly monetary policy review, retaining the repo rate unchanged at 5.15% while maintaining to stance at ‘accommodative’ citing the growth concerns while ensuring the inflation remains within the RBI’s target range of 4% (+/- 2%). All members voted in favour of the above decision.

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Budget Expectations: FY21

28 January 2020

The general sentiment surrounding the Union Budget 2020-21 is that the government would announce a series of measures that would help kick start the revival of the domestic economy. Growth has slumped to an 11 year low in the current financial year and is projected to be 5% by the RBI (5.2% is our forecast).

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Industrial output: November 2019

13 January 2020

During the first 8 months of fiscal year 2019-20, the IIP grew at a lacklustre pace of 0.6% compared with the 5% growth in the corresponding period last year.

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Is investment activity picking up in the economy?

06 January 2020

Investment activity is imperative for the growth of the economy as it has potential to generate output in multiples. The investment in the current fiscal has been subdued so far and a rebound in investment will necessary to enhance the pace of growth.

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Study on Employment for the last 5 years

21 November 2019

The Study reveals that aggregate headcount or employment increased at a CAGR of 3.3% between 2014-15 and 2018-19 i.e. over a four-year period.

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Analysis of IIP growth in September

13 November 2019

Growth came in lower at -4.3% and this was witnessed across all sectors – mining, manufacturing and electricity. In terms of use based classification, growth was negative for both capital and consumer goods which is disappointing.

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Weekly Liquidity Report 6 August

10 August 2018

The liquidity report presents an assessment of the liquidity scenario of India’s banking and financial system for the week ended 10 August’18. An evaluation of various indicators such as repo and reverse repo transactions, call money rates, T-bills and G-Secs yields, government borrowings, bank deposit and credit growth and key global interest rates has been undertaken here to help illustrate the underlying system level liquidity scenario.

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