HOME > BUSINESS > HPCL, IOCL, Adani Ports to benefit from rupee depreciation – Fitch

HPCL, IOCL, Adani Ports to benefit from rupee depreciation – Fitch

FITCHHindustan Petroleum Corporation Limited, Indian Oil Corporation Ltd and Adani Ports and Special Economic Zone Limited are among the Indian companies that will benefit the most from the rupee’s depreciation against the dollar, while Power Grid Corporation of India Ltd, NTPC Limited, Bharti Airtel Limited and Lodha Developers Private Ltd will be among the biggest losers from such a development, Fitch Ratings said in a special report published today.

Fitch Ratings gives advice and data about the creditworthiness and finances of companies and other borrowers.

The report was based on the hypothesis that the Indian rupee depreciates by 15% and 30%.

The benefiting companies have dollar earnings that are sufficient to more than offset the negatives of higher debt and capex in dollar terms, it said.

However, the negatively impacted companies have minimal earnings in dollars, dollar-denominated debt and dollar-denominated capex.

The report delves into the impact of currency depreciation on both balance sheet and cash flow, and shows the resultant impact on net leverage (adjusted net debt/operating EBITDAR) for each corporate under both 15% and 30% currency depreciation scenarios.

“From a balance-sheet perspective, most Indian corporates will be negatively affected due to their exposure to foreign-currency debt. However, at the EBITDAR level, we do not expect any Indian corporate to be negatively affected by a lower rupee, and in fact anticipate that 14 corporates will experience higher EBITDAR, thanks to US dollar-based revenues and limited cost increases,” Fitch said.

At the cash flow level, we estimate that the negative of higher capex in dollar terms, will not negate the positive benefit of higher EBITDAR for most corporates, it added.

Follow ULTRA.news
Manufacturing sentiment steady in Q3; Auto, Cap Goods, Metals bullish FICCI’s latest quarterly survey on Manufacturing indicates a pause in the steady improvement seen in optimism on quarterly production levels. The percentage of respondents expecting production in the current quarter (Oct-Dec) to be higher than last quarter fell to 47% from 50...
GST complaints coming mainly from tax-evaders – Adi Godrej Adi Godrej, chairman of one of India's largest manufacturing and real estate groups, said most of the complaints about the new Goods and Services Tax is coming from businesses that have been built on a model of tax evasion. "The complaints about the GST are mainly coming from ...
Indian Real Estate unsold inventory to fall this year – Fitch Fitch Ratings said it expects a slight improvement in the finances of real estate companies in India and forecast increasing consolidation and a reduction in the massive unsold inventories on their books. "We expect the cash flow from operations of the rated Indian developers...
RCom could sell assets to Reliance Jio, go virtual – Fitch Reliance Communications could ink more spectrum selling and sharing agreements with Mukesh Ambani-controlled Reliance Jio, Fitch Ratings said, adding that the Anil Ambani company would end up as a mobile virtual operator after its ongoing restructuring. RCom promoter Anil Amb...
NRI bank accounts see mega outflows as Gulf crisis hits earnings Net bank deposits by non-resident Indians have fallen by nearly 90% so far this financial year as more and more foreign workers dipped into their bank accounts in the face of a crisis in the Gulf region, industry association ASSOCHAM said. Net bank deposits -- the difference ...
Tata Tele acquisition good for Bharti Airtel – Fitch Bharti Airtel Limited's (BBB-/Stable) announcement that it plans to acquire the consumer mobile operations of Tata Teleservices and Tata Teleservices (Maharashtra) Ltd (Tata Telecom business) is positive for the deal participants as well as the industry, Fitch Ratings said. B...
Indiabulls Real Estate on the mend post demonetization hit – Fitch Fitch Ratings affirmed property developer Indiabulls Real Estate Limited's Long-Term Foreign-Currency Issuer Default Rating at 'B+' with a 'stable' outlook, noting that conditions for the real estate developer are improving. "The Stable Outlook reflects the recovery in IBREL'...
Reliance Infrastructure responds to downgrade by India Ratings Reliance Infrastructure said it disagreed with the decision by India Ratings, a unit of Fitch, to downgrade its debt over delays in equity infusion and monetization of assets. "The Company respectfully disagrees with the views of India Ratings," it said today. "The Company...
Fitch lauds Tata Steel’s thyssenkrupp deal, but rating unchanged Tata Steel Limited's (TSL) memorandum of understanding with thyssenkrupp AGn to create a 50:50 JV in Europe paves the way for TSL to reduce exposure to a structurally weaker business, says Fitch Ratings. However, TSL's Long-Term Issuer Default Rating (IDR) of 'BB' remains on R...
Petrol, LPG consumption up 10% in India; diesel, kerosene sees sluggishness The pace of growth in petroleum consumption slowed this year, but private retailers are getting ready to open more and more outlets, Fitch Ratings said. Consumption of petroleum products, such as diesel, petrol, LPG and kerosene, has been increasing at a rate of about 5% in I...
India to announce new industrial policy in October The Indian government is likely to announce a new industrial policy in October, the ministry of commerce and industry said, and sought feedback from the public. Commerce and industry minister Nirmala Seetharaman will hold a final round of consultations with stakeholders soon,...
Modi’s reforms drag, power plants to face low loads, study India’s energy sector is facing low capacity utilisation in power generation as plant load factor is estimated to remain low at around 62 per cent until 2018-19, noted a recent ASSOCHAM-Crisil joint study. The study also expressed concern over the slow pace of reform implement...
Expecting waivers, farmers stop paying back bank loans? The write-off of farm loans in Uttar Pradesh and Maharashtra seems to be encouraging farmers in other states to stop paying back their farm loans to make sure that they will get the benefits of any farm loan waiver program in their state. This has led to a sharp increase in farm ...
IT companies using illegal tactics to force workers to resign: FITE The Forum for IT Employees, arguably the IT workers rights organization with the largest number of well-wishers and supporters, accused IT companies of using illegal and unethical means to force their workers to submit their resignations. In a meeting with Maharashtra Chief Mi...
GST to hurt some sectors, no rating changes now – Fitch Fitch Ratings said the new Goods and Services Tax regime will hurt the oil & gas, pop-and-mom retail and small and medium enterprise segments, while benefiting auto, cement and organised retail sectors. However, it said it won't revise it ratings due to this at this point. ...
Demonetization took India forward by 3 years – SBI The demonetization of currency notes late last year has doubled the number of card transactions and helped push India's payment digitisation by three years, State Bank of India said in a note. "Even after seven months post demonetization, the transaction value is quite large ...
Farm loan wavers can impact India’s financial profile – Fitch Ratings agency Fitch said the string of farm loan waivers announced by various Indian states could impact the financial profile of the country as a whole. The agency, however, did not directly say that the moves could lead to a downgrade in India's credit rating, which would i...
RCom ‘respectfully disagrees’ with Fitch and Moody’s on its credit rating Anil Ambani-led Reliance Communications said it disagrees with the decision of agencies Moody's and Fitch to downgrade the company's credit rating based on its 'standstill agreement' with its lenders. Shares of RCom fell 4% to Rs 19.30 on the National Stock Exchange today ...
Fitch cuts IDBI Bank rating as NPAs climb to 21% Fitch Ratings said it downgraded IDBI Bank's Long-Term Default Rating and its 'viability rating' by one notch each to 'BB+' and 'ccc' with a stable outlook. "IDBI Bank's Viability Rating reflects the deterioration of its financial profile in the last two years and our expectat...
Fitch Ratings upgrades Tata Motors on improving business performance JLR contributes most of the company's profits Fitch Ratings has upgraded its rating on Tata Motors by one notch, pointing to the automaker's improving business performance. "The upgrade reflects the sustained improvement in TML's Indian automotive business over the last tw...