Stating that bank credit outstanding could cross Rs 200 lakh crore by March 2025, credit growth will remain healthy, albeit a tad lower at 14 per cent this fiscal year.
Credit growth was 16 per cent in the last fiscal year that ended on March 31.
Overall gross non-performing assets (NPAs) will continue to trend down and touch fresh decadal lows, it said.
Crisil Ratings Senior Director and Chief Ratings Officer Krishnan Sitaraman said there is a likelihood of interest rate cuts globally in 2024.
“We expect the RBI to cut interest rates in the second half of the current fiscal,” Sitaraman said, adding that credit quality is likely to remain positive.
The RBI is scheduled to announce its first monetary policy review for the current fiscal on April 5.
For FY25, as many as 21 of 26 corporate sectors have strong to favourable credit quality outlook, marked by robust balance sheets and healthy operating cash flows — expected to be as much, or higher, than in fiscal 2024.
These include auto-component manufacturers, companies in the hospitality and education sectors where the credit quality is supported by healthy domestic demand.
It also includes sectors benefiting from the government’s infrastructure spending, such as construction companies, and steel, cement and capital goods manufacturers.
Four corporate sectors — specialty chemicals, agrochemicals, textile cotton spinning and diamond polishers — are facing headwinds given their fortunes are aligned with global macroeconomic conditions, which are subdued at present.
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