The US based Credit Ratings and Research Company has predicted something that every Indian will be proud of; and would probably make one reminisce the “Acche Din”. Top Indian companies are expected to outperform their Chinese competition; thanks to the government’s increased expenditure on the “Make in India” programme.
The transportation sectors and the infrastructural developments can be considered as the catalysts who led to this research.
Power and the transportation are said to be the two pillars which intercept the development of a global manufacturing destination.
On one side, when Indians can now boast of the bright future, on the other side, Chinese companies don’t seem to look forward to a better tomorrow. This can be a result of the government influence and increasing credit risk.
“Our analysis of India’s top 200 companies by market capitalisation against their Chinese counterparts shows that government influence is far greater for listed companies in China than in India. This directly affects the companies’ flexibility to reduce capital spending, generally results in weaker profitability and eventually shows up in higher leverage.” said the credit analyst, Mehul Sukkawala, S&P Global Ratings to ET.
“India faces the risk of debt contraction because 15% of the top 200 companies account for 60% of the net debt and coupled with a high interest regime compared with other emerging Asian economies might result in companies facing financial stress.”
Contradictorily, this news doesn’t come with any less clauses, India’s growing interest rate environment, and government’s increasing number of debts, which could lull the country’s growth momentum, according to the American Financial services company.
Tags: Make in India
