India Inc credit profile gets boost from steady demand

MUMBAI: India Inc’s credit profile improved in the first half of FY26,with rating upgrades continuing to outpace downgrades across agencies. The improvement in credit profile was driven by resilient domestic demand and govt-driven infrastructure spending, offsetting the drag from escalating US tariffs.

Credit rating agencies—CareEdge, ICRA, Crisil, and India Ratings (Ind-Ra)—said credit quality remained robust, aided by strong balance sheets, cautious capital allocation, and supportive local conditions.

CareEdge’s credit ratio (ratio of upgrades to downgrades) improved to 2.6 times in H1, from 2.4 times in H2 of FY25. ICRA reported a sharper rise, with a 2.9 ratio, while Crisil stood at 2.2. Ind-Ra’s downgrade-to-upgrade ratio stayed rangebound at 0.3. Reaffirmations were broadly steady, with CareEdge and Crisil noting stable shares of portfolios unchanged. “Corporate India’s strong economic moat, developed since the pandemic, continues to safeguard credit profiles against relentless geopolitical and economic uncertainties,” said Arvind Rao, senior director at Ind-Ra.

The pattern of upgrades and downgrades pointed to a two-speed economy. Infrastructure dominated the upgrades, reflecting Govt-led capex and policy support.