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Informist, Monday, May 25, 2026

 

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--ICRA official: Will review power distribution cos' ratings shortly 
--CONTEXT: Moody's, ICRA joint press meet on India's credit outlook 
--ICRA official: See 4-6% growth in passenger vehicle segment FY27 
--ICRA official: Aviation growth seen good FY27 despite near-term headwinds 
--Moody's MD: AI to impact India's svcs sector, add labour mkt uncertainty 
--CONTEXT: Moody's MD Halan at press meet on India's credit outlook 
--Moody's official: India fuel prices not very high for demand destruction 
--Moody's official:See Brent at $90-$110/bbl rest of yr assuming Hormuz opens 
--ICRA official: Rabi season more challenging than kharif

 

MUMBAI – ICRA Ltd. has revised its outlook on aviation, fertilisers, and the refining and marketing segment within the oil and gas sector to negative because of the geopolitical crisis in West Asia and evolving tariff developments with the US. However, growth in the aviation sector in the financial year 2026-27 (Apr-Mar) is seen to be "good" despite near-term headwinds as there is hope for growth on the passenger front, K. Ravichandran, executive vice-president and chief rating officer at ICRA, said at a joint Moody's-ICRA media briefing Monday.

 

Along with global uncertainty, weather-related risks add to the existing pressure. The likely El Nino climate pattern predicted during the southwest monsoon in India could lead to uneven distribution of the monsoon, which would weigh upon rural income and discretionary spending, Ravichandran said. "There could be downward pressure on demand in sectors like tractors, two-wheelers, FMCGs (fast-moving consumer goods),and construction materials linked to rural housing," he said.

 

ICRA sees 4-6% growth in the passenger vehicle segment and 3-5% in the two-wheeler segment in FY27. The two-wheeler segment grew nearly 11% on year and the passenger vehicle segment grew over 13% on year in FY26, according to data from the Society of Indian Automobile Manufacturers.

 

The weather-related risks on the back of the emergence of El Nino may not have as much effect in the upcoming kharif season because of higher than average reservoir levels in the country, Ravichandran said. However, the rabi season is expected to be more challenging, he added.

 

Talking about the artificial intelligence boom, Vikash Halan, managing director for corporate finance at Moody's, said structural shifts driven by AI and automation are seen affecting India's services sector and will add to labour market uncertainty. While the AI-driven productivity gains support long-term competitiveness, the pace of adoption could put pressure on revenue growth and increase execution risks, Halan said. 

 

ICRA also gave a negative outlook for the power distribution sector for FY27. Ravichandran said the rating agency will review the ratings of power distribution companies shortly.

 

According to ICRA, improvement in order books has driven a positive outlook for capital goods and defence companies while health care maintains a favourable position as demand for medical treatment continues to rise.

 

Commenting on the fourth hike in fuel prices in India in May, Moody's Halan said India's fuel prices are not so high as to lead to demand destruction. He sees the price of Brent crude oil remaining between $90 and $110 per barrel for the rest of the year, assuming the Strait of Hormuz reopens.  End

 

Reported by J. Navya Sruthi and Cassandra Carvalho

Edited by Rajeev Pai

 

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