Rating agency, CRISIL, has downgraded 484 companies in the first half (H1) of 2012-13, the highest for any six-month period, thereby underscoring a mounting pressure on corporates' credit quality amid slowing demand and pressure on liquidity. However, with pressure on profitability and on economic growth showing signs of abating, CRISIL is expecting the credit ratio to begin bottoming out. At the same time, the rating agency is forecasting the rating downgrades to continue outnumbering upgrades in the near term, although their severity and intensity may decline.
CRISIL in its report stated that, “having declined continuously for nine quarters, EBIDTA margins are now likely to increase. Also, the pressure on GDP growth seems to have eased. Together, these factors should ensure that the credit ratio does not decline materially from current levels” CRISIL’s credit ratio (ratio of upgrades to downgrades) declined to 0.66 in first half of 2012-13 from 0.91 in H2 of 2011-12, primarily on account of slowdown in economy.
Of the 484 downgrades down by the rating agency, 183 were to ’default’ category, which were primarily from rating categories ‘CRISIL BB’ and lower, which are inherently more vulnerable to defaults. The rating upgrades, on the other hand, were supported by improved business performance due to stabilization of past capital expenditure (capex), and consequently, improved cash flows.
Among the downgrades, one third of the downgrades were down among the highly-indebted industries, including power, construction, textile and engineering & capital goods. The highest upgrades rates, on the other hand, were in retail consumption linked sectors, such as packaged foods and home furnishing.
| Company Name | CMP |
|---|---|
| CRISIL | 4117.45 |
| ICRA | 5418.70 |
| Care Ratings | 1025.00 |
| View more.. | |
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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