Mumbai, October 15, 2026: Brickwork Ratings (BWR) has projected that infrastructure and power sectors will attract funding in the second half of FY27, driven by project execution and timely payments. The agency also expects commercial real estate to lead funding flows in the services sector, while gold loans and loans against property are set to bolster non-banking financial company (NBFC) lending. However, BWR noted that small NBFCs with significant microfinance exposure remain under stress.
India Inc’s credit profile showed resilience in the first half of FY27, despite challenges such as elevated crude oil prices, deficient monsoon rainfall, and tighter global monetary conditions. Data from major Indian rating agencies indicated 2.7 upgrades for every downgrade between April and September 2026, compared to 2.4 in the same period last year. Downgrades fell by 11%, while upgrades remained steady.
Sector-wise credit trends
According to K. H. Patnaik, Chief Ratings Officer at BWR, upgrades were led by infrastructure, power, capital goods, auto components, and secondary steel, supported by public spending and steady domestic demand. In contrast, textiles, ceramics, diamonds, and specialty chemicals faced pressure from weak exports and competition from cheaper imports.
BWR-rated companies recorded 3.3 upgrades for every downgrade, with upgrades constituting 35% of rating reviews. The ratio of corporate debt to equity declined to about 0.7 times in FY25 from 1.1 times in FY20, providing companies with greater borrowing capacity.
Commercial real estate and NBFC lending
Non-food bank credit grew 18.8% year-on-year in August 2026, up from 10.2% a year earlier, while corporate bond fundraising dropped 34% during April to June. Services credit expanded 24.3% in the same period, with commercial real estate as a key driver. Hyderabad was highlighted for experiencing its strongest-ever first half for office leasing.
Gold loans and loans against property were identified as supporting NBFC lending, but the outlook for small NBFCs with heavy microfinance exposure remains challenging.
Risks and outlook
BWR cautioned that exporters face renewed US tariff risks, while rural and discretionary demand could weaken, especially in southern India where rainfall was 24% below normal. “H1FY27 showed India Inc has the strength. H2FY27 will test how well it uses it,” said Patnaik, emphasizing the importance of strong balance sheets as financing costs rise.
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