Overview
- Crisil Ratings, which on Wednesday released its FY27 outlook, forecast 13% loan growth for banks and a rise in gross bad loans to about 2.5% by March 2027.
- Credit quality signals cooled in H2 FY26 as Crisil’s upgrade-to-downgrade ratio slipped to 1.50 from 2.17, though upgrades still led and reaffirmations rose to roughly 82%.
- A sector scan of 30 industries found most debt remains resilient, but ceramics faces a negative view and airlines, polyester textiles, specialty chemicals, flexible packaging, diamond polishers and auto parts face moderate strain.
- The agency flagged stress risks in loans to small firms tied to West Asia trade or to crude and LNG inputs, and it said deposit growth is critical with an elevated credit-to-deposit ratio showing loans outpacing deposits.
- CareEdge said crude at $100 a barrel in FY27 could slow GDP growth to about 6.5% with inflation near 5.1% to 5.3%, and agencies noted that any relief steps would likely come only if the conflict drags on.