Mumbai, October 23, 2026: Brickwork Ratings (BWR) expects infrastructure and power sectors to attract increased funding in the second half of FY27, supported by ongoing project execution and timely payments. The agency also projects that commercial real estate will drive funding flows in the services sector, while gold loans and loans against property will bolster non-banking financial company (NBFC) lending. However, smaller NBFCs with high microfinance exposure are likely to remain under stress.
According to BWR, India Inc’s credit profile demonstrated 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, up from 2.4 a year earlier. Downgrades fell by 11%, while the number of upgrades remained steady.
Upgrades led by infrastructure and power
BWR Chief Ratings Officer K. H. Patnaik said upgrades were led by infrastructure, power, capital goods, auto components, and secondary steel, driven by public spending and steady domestic demand. In contrast, sectors such as textiles, ceramics, diamonds, and specialty chemicals faced pressure from weak exports and competition from lower-priced imports.
Among BWR-rated companies, there were 3.3 upgrades for every downgrade, with upgrades accounting for 35% of rating reviews. Corporate debt relative to equity fell to about 0.7 times in FY25 from 1.1 times in FY20, providing companies with increased borrowing capacity. “The lesson for companies is simple: a strong credit rating is now a funding asset,” Patnaik said, highlighting the importance of creditworthiness amid tightening financing conditions.
Commercial real estate drives services credit growth
Non-food bank credit rose 18.8% year-on-year in August 2026, compared to 10.2% a year earlier, while corporate bond fundraising declined 34% during April to June. Services credit expanded by 24.3% in the same period, with commercial real estate as a key driver. Hyderabad, in particular, recorded its strongest-ever first half for office leasing.
Exporters are facing renewed US tariff risks, while rural and discretionary demand may weaken, especially in southern India, where rainfall was 24% below normal. Patnaik cautioned, “H1FY27 showed India Inc has the strength. H2FY27 will test how well it uses it,” underscoring the need for strong balance sheets as financing costs increase.
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