STATE OF THE NATION

September 2013
T
r
a
n
s
p
o
r
t
a
l

t
R
e
e
s
t
a
e
Inflation Inflation
Consumer
Durables
Corporate
Profitability
Fiscal Deficit Fiscal Deficit
Cement
S
t
e
e
l
Hotels
Capital flows
Working Capital
T
r
a
n
s
p
o
r
t
Concern
Concern
Transport
H
o
t
e
l
s
R
e
a
l

e
s
t
a
t
e
B
a
n
k
i
n
g
T
r
a
n
s
p
o
r
t
Banking
Corporate
Profitability
Consumer
Durables
T
r
a
n
s
p
o
r
t
Hotels
Steel
B
a
n
k
i
n
g
Working Capital
Inflation
Inflation
R
e
a
l

e
s
t
a
t
e
W
o
r
k
i
n
g

C
a
p
i
t
a
l
Banking
Hotels
Steel
Banking
C
o
r
p
o
r
a
t
e

P
r
o
f
i
t
a
b
i
l
i
t
y
Hotels
I
n
f
l
a
t
i
o
n
Monsoon
Agriculture Agriculture
T
r
a
c
t
o
r
s
Pesticides
Two Wheelers
Exports Exports
I
T
-

I
T
E
S
P
h
a
r
m
a
c
e
u
t
i
c
a
l

Textiles
T
e
l
e
c
o
m
Leather
Pesticides
Pesticides
Leather Handicrafts
Agriculture
IT-ITES
T
e
x
t
i
l
e
s

Monsoon
Tractors
Silver lining
Silver lining
Silver lining
Silver lining
Exports
Food prices
Food prices
Food prices
IT-ITES

L
e
a
t
h
e
r

M
o
n
s
o
o
n

T
r
a
c
t
o
r
s
Exports
T
r
a
c
t
o
r
s
Two Wheelers
T
w
o

W
h
e
e
l
e
r
s
IT-ITES
Pesticides
Tractors
Exports
Textiles IT-ITES
High
Interest Rate
High
Interest Rate
Investments Investments
CAD CAD
Real Estate
Cars Commercial Vehicles
Capital goods
C
o
n
s
t
r
u
c
t
i
o
n
Infrastructure
Gold
Oil imports
Mining
C
h
a
l
l
e
n
g
e
s

Challenges
High interest rates
High interest rates
High interest rates
CAD
CAD
CAD
M
i
n
i
n
g
Construction
Oil imports
H
i
g
h

i
n
t
e
r
e
s
t

r
a
t
e
s
C
h
a
l
l
e
n
g
e
s

Volatile
Rupee
C
o
n
s
t
r
u
c
t
i
o
n
Volatile
Rupee
CAD
Volatile Rupee
Volatile
Rupee
C
o
n
s
t
r
u
c
t
i
o
n
O
i
l

i
m
p
o
r
t
s
Commercial Vehicles
CAD
THE
GOOD
THE
BAD
AND THE
UGLY
Economy Sectors Companies
STATE OF THE NATION
Economy Sectors Companies
STATE OF THE NATION
This page is intentionally left blank
STATE OF THE NATION: economy, sectors, companies
Roopa Kudva
CRISIL is pleased to present its first State Of The Nation report, a unique top-down-meets-bottom-up analytical
exercise.
For perspective, let us give you its sweep.
This is about the power of stringing together deep analyses from the micro to the macro level. We started with
granular data on 2,481 companies that CRISIL rates as investment grade. Then we leveraged our industry
research spanning more than 70 sectors. Our industry analysis is supported by strong on-the-ground inputs
through primary sourcing from players, vendors, distributors, industry associations and lenders.
Finally, we brought in our macroeconomic research capabilities and profound understanding of risk. What you
get is a comprehensive portrait of the economic state of the nation like no other.
For example, our assessment shows that contrary to popular belief, forex volatility is a source of material
vulnerability for only 6% of the 2,481 CRISIL investment grade companies that account for 32% of banks'
corporate lending. Whats most stressful is the demand slowdown.
And how does it look overall?
While it may seem all dark out there with falling corporate sales, falling currency, falling GDP growth
juxtaposed with rising crude oil prices, rising inflation and a wide current account deficit there are flashes of
hope.
To be sure, two-thirds of the major sectors are being hit by declining sales growth as GDP growth limps to a
decadal low, even as the twin blows of high crude oil prices and weak rupee rub salt.
Those suffering the most are the domestic-demand-driven sectors such as cement, steel, power, construction
and automobiles.
But, as in life, there are two sides to the story.
The falling rupee is manna from heaven for exporter-companies from the information technology, business
process outsourcing, pharmaceuticals and textiles space.
And, after a long time, telecoms will do well due to improved pricing power.
Watch out for agriculture too - it has the potential to surprise on the upside.
In this milieu, CRISIL decided to take a leaf out of Sergio Leones famous trilogy of westerns from the Sixties
the third one to be precise Il Buono, Il Brutto, Il Cattivo, a.k.a, The Good, The Bad and The Ugly, to paint the
state of the nation.
Read on to get the picture.
Managing Director & CEO
STATE OF THE NATION
This page is intentionally left blank
Table of Contents
Executive Summary 1
The Economy 5
The Sectors 11
How Vulnerable Is India Inc? 17
n Key Findings 21
n Methodology
- Annexure 1 26
- Annexure 2 28






-------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
-------------------------------------------------------------------
------------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Page No.
STATE OF THE NATION
This page is intentionally left blank
Executive Summary
1
STATE OF THE NATION
THE GOOD
AGRICULTURE BOUNTY ON ITS WAY
Timely, well-distributed monsoons and a 6.8% increase in the kharif sowing area mean agriculture would
probably be the only sector to surprise on the upside. Farm GDP growth could more than double from last
year's 1.9% to 4.5% (we now add 100 bps to our July forecast of 3.5%). This will help check food prices,
support consumption in the rural areas, and improve sales of tractors and two-wheelers. If India gets lucky
and agriculture growth surges 6% (we have seen this happen in 2010-11 when, after a good monsoon, it had
rocketed 7.9%), overall GDP growth could be a much better 5.2% compared with our 4.8% call.
BOOST FOR EXPORTS
With a weak currency and improving growth prospects in advanced economies, exports will gain. Sectors
such as textiles, leather, pharmaceuticals and IT-ITES have improved. This will help pare the trade and
current account deficit.
FOREX RISK NOT ALL THAT HIGH
Here's the counterintuitive bit. Despite the significant depreciation in the rupee, foreign exchange
vulnerability is the least of the stress factors impacting the credit profile of as many as 2,481 firms rated in the
BBB- and above (investment grade) category by CRISIL (these firms account for about 32% of the banking
system credit to corporates and 82% of CRISIL-rated debt). That sure flies in the face of conventional
wisdom, but a caveat is in order: the universe of CRISIL-rated firms does not include many of the major
groups such as Essar, GMR, GVK, JSW, Jaypee and Videocon that are trapped in Ground Zero of the
currency maelstrom.
INFLATION RISING
Surging crude oil prices and falling rupee will push wholesale price index (WPI) inflation higher than 6% even
as domestic demand slows. This will make it difficult for the Reserve Bank of India (RBI) to nudge interest
rates south and will cause stress in leveraged sectors such as infrastructure and real estate.
NO ROOM FOR STIMULUS
The heavy burden of oil subsidies and declining growth in tax revenues will lead to slippages in the fiscal
deficit, which is expected to bloat to 5.2% of GDP from a budgeted 4.8%, leaving no scope for stimulus.
BULWARK SERVICES WEAK
The services sector has been the mainstay of the economy for some time now. But the sharp and sustained
slowdown will weaken sectors dependent on domestic demand, such as trade, hotels & restaurants,
transport, banking, financial & business services and real estate. However, IT-ITES provides some offset.
Overall, services will grow around 6.5%, a pale shadow of the nearly 10% growth seen in the last decade.
FIRMS GASPING FOR LIQUIDITY
Stretched working capital cycles are aggravating liquidity pressures on companies. Liquidity pressures are a
source of stress for 16% of the 2,481 companies analysed. Large firms with operating income exceeding Rs
10 billion are impacted more acutely.
THE BAD
2
THE UGLY
DEMAND SLOWDOWN HURTS THE MOST
Industry and services, accounting for 86% of the GDP, will grow at a slower pace than last year. Two out of
three sectors of the economy will experience lower revenue growth. Among sources of stress impacting
corporates, demand slowdown remains the most important for nearly a fourth of the firms assessed by
CRISIL, followed by stress on financing cost (interest cover) for a fifth. Larger firms (with operating income
over Rs 1,000 crore) are facing more challenges due to higher level of indebtedness and increasing stress on
financing cost.
INDUSTRIAL GROWTH STAYS ANAEMIC
Weak industrial growth means sectors that will suffer the most are infrastructure, cement, steel, power,
construction and automobiles, where sales volumes will remain under pressure due to the relentless
slowdown in the investment cycle and decelerating consumption.
RAMIFICATIONS OF THE RUPEE ROIL
India's huge current account deficit (CAD) will keep the rupee weak. It could rebound to 60/$ by March 2014
as CAD declines to 3.9%, but the currency will remain significantly depreciated compared with last fiscal. This
will put upward pressure on inflation, fiscal deficit and input costs for corporates.
3
STATE OF THE NATION
4
This page is intentionally left blank
The Economy
5
STATE OF THE NATION
THE GOOD
AGRICULTURE TO THE RESCUE
Timely and well-distributed monsoon will offer a silver lining this year by lifting agricultural output substantially.
Cumulative rainfall during July-August was 11% in excess of normal at the all-India level. Among the four
regions, north-west, central and south received excess rains, whereas rainfall was deficient, or 29% below
normal, only in the north-east. As a result, we have revised our agriculture growth forecast to 4.5% for this
fiscal (up from 3.5%, its trend growth rate in the last 7 years, called in July). In the event of exceptionally high
agriculture growth (say 6%) and its spillover into industry and services, GDP could even grow by 5.2%.
4.8
4.5
1.0
6.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Overall GDP Agriculture Industry Services
F
Y
0
9
F
y
1
0
F
y
1
1
F
y
1
2
F
Y
1
3
P
F
Y
1
4
F
F
Y
0
9
F
y
1
0
F
y
1
1
F
y
1
2
F
Y
1
3
P
F
Y
1
4
F
F
Y
0
9
F
y
1
0
F
y
1
1
F
y
1
2
F
Y
1
3
P
F
Y
1
4
F
F
Y
0
9
F
y
1
0
F
y
1
1
F
y
1
2
F
Y
1
3
P
F
Y
1
4
F
Source: CSO, CRISIL forecast
Firing on one cylinder
CRISIL's macroeconomic forecast for 2013-14
2012-13
Total GDP (y-o-y %)
Agriculture
Industry
Services
WPI inflation (average)
Fiscal deficit (% of GDP)
10-year G-sec yield (March-end)
Current account deficit (% of GDP)
Rs per US$ (March-end)
5.0*
1.9*
2.1*
7.1*
7.3
4.9
8.0
4.8
54.5
2013-14
(Jul '13 forecast)
5.5
3.5
3.5
6.9
5.3
5.2
7.5-7.7
4.2
56
2013-14
(Sep '13 forecast)
4.8
4.5
1.0
6.5
6.2
5.2
7.8-8.0
3.9
60
Note: At this juncture, there is more downside than upside to our forecasts. If we get lucky and agriculture
exceeds expectations and grows at 6%, the economy will grow at 5.2% this fiscal.
* Central Statistical Organisation (CSO) provisional estimates
6
EXPORTERS GAIN, COMPETITIVENESS IMPROVES
The weaker rupee will aid export sectors such as IT-ITES, textiles, readymade garments and cotton-yarn
spinners, which source inputs domestically. A pick-up in exports will also ease the pressure on the current
account. Equally importantly, a falling rupee improves India's currency competitiveness. Over the last four
years, the rupee has been steadily losing ground against currencies of competing exporter economies. Since
January this year, it has slid 20% versus the dollar, while the Chinese yuan has gained 1.6% and the
Bangladeshi taka 2.4%.
HEADLINE INFLATION TO FIRM UP TO 6.2%, INTEREST RATES TO RISE
We had highlighted in July that there was an upside risk to inflation in the form of the weak rupee. That risk has
now materialised. The rupee has depreciated nearly 20% in 2013 (as of September 5). WPI inflation rose
sharply to 5.8% in July from 4.9% in June.
The weak rupee will influence the import component (market-linked fuels, ferrous and non-ferrous metals
and edible oil) of inflation. Due to continued political unrest in Egypt, and now the crisis in Syria, upward
pressure on global crude oil prices will continue; in the first half of this fiscal, average crude oil prices are likely
to be $105 per barrel compared with our earlier assumption of $102 per barrel. For the full fiscal year brent
crude is expected to average US $105-110. Firm global crude oil plus weak rupee will drive up fuel inflation.
Even though demand remains weak, firms will have to pass on to consumers at least some of the increased
input costs arising from the weak rupee as well as other accumulated input cost build-up due to diesel and
electricity price hikes. This will lead to an increase in core inflation, as reflected in both non-food
manufacturing inflation and the CRISIL core inflation indicator. The latter has already risen to 3.7% in July
from 3.6% in June.
It is also important to note that despite a good monsoon, primary food inflation remains close to 10%. In view
of these factors, we have revised upward the average WPI inflation forecast for this fiscal to 6.2% from 5.3%.
Liquidity tightening measures undertaken by the Reserve Bank of India to limit the rupee's fall and contain its
volatility have led to an increase in lending rates. As of September 2, 2013, private sector banks such as
HDFC, ICICI, Axis, YES, DCB, Lakshmi Vilas and Kotak Mahindra had raised their base lending rates by 20-
35 basis points. In view of the already depressed investment climate, higher interest rates will only serve to
inhibit the revival of investment.
FISCAL DEFICIT TO SLIP TO 5.2% OF GDP
The government's fiscal deficit in the first quarter was almost 50% of its budgeted level for the entire year,
which is not a very heartening sign. What is encouraging, though, is that the government is making all the
right noises on containing it to the targeted 4.8% levels. This commitment to fiscal consolidation implies that
some cutback on government expenditure, especially capital expenditure, from the budgeted level, is likely
for the year as a whole. However, the weak rupee is expected to increase under-recoveries, which will raise
the petroleum subsidy burden of the government (Rs 770 billion compared with the earlier estimate of Rs 550
billion) while tax revenues may fall short of budgeted levels due to slowing growth.
To ensure that there is no further loss of credibility with respect to its management of the economy, we expect
the government to take all steps to ensure that fiscal deficit as a percentage of GDP will not breach the 5.2%
mark. If revenue collection is adversely affected due to lower growth, the government is likely to curtail its
expenditure significantly from budgeted levels rather than allow the fiscal deficit to slip.
THE BAD
4 7
STATE OF THE NATION
SERVICES GROWTH TO BE HIT BY INDUSTRIAL SLOWDOWN
The negative effects of the industrial slowdown are likely to spill over into services sub-sectors such as trade,
transport and banking.The linkages between industry and services have strengthened over time;
industry/manufacturing is extending its weak performance to the services sector as well. Input-output data
suggests that producing one unit of industrial output required 0.44 units of services in 2007-08 versus 0.36
units in 1988-89. The depreciation of the rupee and slowing growth are also resulting in an increase in the
non-performing assets of banks, which are already suffering a decline in profitability on account of rising
borrowing costs and mark-to-market losses on bond portfolios. Under these circumstances, we expect
financial services growth to be lower than forecast earlier. Overall, the services sector is likely to grow by
6.5% this fiscal, which is slightly lower than our previous estimate of 6.9%.
GROWTH TO SLIP TO 4.8% THIS FISCAL
Economic growth is projected to weaken further to 4.8% in 2013-14, the lowest since 2002-03 when it had
logged 4.0%. Growth/demand slowdown (business risk) emerges as the most important vulnerability factor
for India Inc. Net-net, there is neither going to be the V-shaped recovery seen after the Lehman crisis, nor a
U-shaped one. It would more likely be an L-shaped one where the slowdown would continue through this
fiscal.
INDUSTRIAL GROWTH TO STAY TEPID, INVESTMENT CLIMATE WEAK
Industrial recovery is paramount to the revival of the economy. But there is no such welcome sight on the
near-term horizon. In the first quarter, industrial GDP showed a larger-than-expected slowdown to 0.2%
compared with the corresponding period of the previous year. The investment climate remains weak the
slowdown in demand made worse by lack of affordable credit.
The mining sector, on the other hand, continues to suffer on account of regulatory hurdles in key states. And
even if these issues were resolved immediately, no significant push to growth would be felt in 2013-14 due to
its lagged impact. As a result, we now expect mining GDP to contract for the third consecutive year.
The overall contraction in industrial activity will be sharper than what it was in each of the previous two years.
Taking into account this slower-than-expected momentum, industrial output is now forecast to grow at a
slower pace of 1% compared with 3.5% earlier.
NO QUICK FIX FOR THE RUPEE
Although there are signs that the market has overreacted in recent times, we believe that a large part of the
problems engulfing the rupee arise from structural issues. Until these are adequately addressed, the rupee
will continue to be weak and highly volatile in the near-to-medium term against major global currencies.
Nevertheless, it is likely to strengthen to 60 per dollar by March 2014 from its current level of around 65-66,
because the current account deficit (CAD) is likely to fall to 3.9% of GDP in 2013-14, compared with 4.8% last
year.
CAD is expected to correct significantly in the second half of the year due to a decline in non-oil imports,
including gold. This will be supported by higher foreign capital inflows in the second half of the year if the
steps announced by the government to attract $11 billion in capital inflows (via foreign borrowings by state-
owned financial institutions and public sector oil companies, and measures to attract non-resident deposits)
begin to yield fruit. In addition the US $50 billion bilateral swap agreement with Japan will also provide
support to the rupee in times of stress.
THE UGLY
8
Our revised forecast of CAD (3.9% of GDP this fiscal) is lower than our previous estimate of 4.2% mainly due
to the expectation of a sharper slowdown in growth of non-oil imports, led by a nearly 28-30% fall in gold
imports. Gold imports are likely to ease on the back of restriction on sale of gold bars and coins as well as a
hike in customs duty on gold imports to 10%. We also expect capital and consumption goods imports to
continue to moderate due to weak domestic demand.
Although the CAD is now expected to be around $71-72 billion, total foreign capital inflows this year will be
insufficient to cover it. As a result, the rupee will, on an average, be 12-14% weaker compared with last fiscal.
The third quarter could also see high volatility in the rupee if the US Federal Reserve begins to taper its
quantitative easing programme as expected. On the flip side, there could be some recovery in the currency
around this time if CAD starts correcting and capital inflows begin to rise.
The downward revision of the fiscal year-end forecast for the rupee to 60/$ from 56/$ earlier is due to the
expectation of lower-than-earlier-anticipated foreign portfolio inflows.
35
40
45
50
55
60
65
70
INR/USD
March-end of the fiscal
Highest point in the fiscal
M
a
r

9
9
M
a
r

0
0
M
a
r

0
1
M
a
r

0
2
M
a
r

0
3
M
a
r

0
4
M
a
r

0
5
M
a
r

0
6
M
a
r

0
7
M
a
r

0
8
M
a
r

0
9
M
a
r

1
0
M
a
r

1
1
M
a
r

1
2
M
a
r

1
3
M
a
r

1
4
4
2
.
4
4
3
.
6
4
6
.
6
4
8
.
8
4
7
.
5
4
3
.
4
4
3
.
8
4
4
.
6
4
4
.
6
4
0
.
0
5
1
.
0
4
5
.
1
4
4
.
7
5
1
.
2
5
4
.
4
6
0
.
0

#
4
2
.
6
4
3
.
6
4
6
.
9
4
8
.
9
4
9
.
1
4
7
.
5
4
6
.
5
4
6
.
3
4
7
4
3
.
2
5
2
.
1
5
0
.
5
4
7
.
6
5
4
.
2
5
7
.
2
6
8
.
4
*
Every rupee depreciation episode sets a new low
*Till September 5, 2013
Note: Each phase of rupee depreciation since 2008 has been followed by gradual appreciation, but the
currency fails to come back to its previous level. In fact, the rupee is yet to recover from the fall it experienced
in the aftermath of the Lehman crisis.
Source: CRISIL
9
#
CRISIL forecast
STATE OF THE NATION
10
This page is intentionally left blank
The Sectors
711
STATE OF THE NATION
The sectoral picture shows a forking out of the economy with gainers from the rupee's depreciation on
the one side and a significantly larger lot that is in pain on the other. An outlier is the telecom sector,
which is seeing much-needed pricing power after years of cut-throat competition. So, as IT,
pharmaceuticals, textiles and private oil players do well, public sector oil companies, construction, capital
goods and commercial vehicle makers will remain under severe pressure. Car makers and realtors will
have a rough ride too.
Sector
Export-linked sectors
Automobile sectors
Infrastructure-linked sectors
Other sectors
IT services
Pharmaceuticals
Readymade garments*
- Exports
- Domestic
Cotton yarn
Two-wheelers
Commercial Vehicles
MHCV
LCV
Bus
Cars & UVs
Tractors #
Auto components
Construction
Cement
Power
Steel
Refining & marketing
Telecom
Hotels
Real estate
Parameter Parameter change(%) EBITDA margins
FY13 FY14P FY13 FY14P
Revenue (USD)
Revenue (Rs)
Revenue (USD)
Revenue (Rs)
Revenue (Rs)
Volume (Nos)
Volume (Nos)
Volume (Nos)
Volume (Nos)
Volume (Nos)
Volume (Nos)
Volume (Nos)
Revenue (Rs)
Revenue (Rs)
Volume (MT)
Million units (kwh)
Volume (MTPA)
Volumes (MTPA)
Average revenue per user (Rs)
Revenue (Rs)
New home sales (units)
10.0%
24.0%
-6.0%
4.0%
24.3%
2.9%
-2%
-26%
16%
-4%
2.0%
-2.0%
2-4%
6.8%
3.0%
6.5%
4.6%
4.7%
4.0%
6.0%
-5%
13-15%
20-22%
4-5%
5%
20-22%
4-6%
-8 to -10%
-10 to -15%
-8 to -10%
1 to -1%
-8 to -11%
16-18%
0 to -2%
2-4%
2.5%
4.70%
2-3%
2.4%
7-9%
3-4%
-6%
24.2%
21.8%
11.1%
14.5%
15.3%
9.2%
4.4%
n.a.
n.a.
n.a.
n.a.
12.7%
12.3%
12.8%
22.3%
n.a.
17.0%
n.a.
26.2%
18.8%
n.a.
26.7-27.2%
22-24%
13%
16.5-17%
17-18%
9-9.5%
2-2.5%
n.a.
n.a.
n.a.
n.a.
13.5-14%
11.7-12%
12-12.5%
19-19.5%
n.a.
15-16%
n.a.
26.7-27.2%
16-17%
n.a.
* for calendar years 2012 and 2013
#represents PBIT margins
Note: Source: CRISIL
12
THE GOOD
EXPORTER ECONOMY ON A GOOD WICKET
Export-oriented sectors are expected to see higher volumes as well as improved realisations. Volumes are
expected to increase in sectors such as IT and textiles due to the improvement in economic outlook in key
markets such as the US. Along with pharmaceuticals, these sectors are expected to witness higher
realisations in rupee terms on account of currency depreciation.
IT TO SEE FASTER REVENUE GROWTH
The IT sector is expected to see faster dollar revenue growth (around 14% compared with 10% in FY13) on
the back of an improvement in the demand outlook in the US and Europe. Despite a 1-2% decline in billing
rates and higher onsite hiring, earnings before interest, tax, depreciation and amortisation (EBITDA) margins
are expected to expand close to 250-300 bps, led by a weak rupee (expected to average 62/$ compared with
54/$ in FY13).
PATENT CURBS IN PHARMA
The pharmaceutical sector, where exports contribute close to 60% of revenues, is expected to see slower
dollar revenue growth (around 12% compared with nearly 18% in FY13) due to fewer drugs going off patent.
Growth of domestic formulations is expected to be steady at nearly 12%, despite some pressure on
realisations because of the new drug-pricing policy. Rupee revenues could grow 20-22% compared with
24% last year. EBITDA margins will expand by 100-150 bps for large players with significant formulation
exports to regulated markets in the US and Europe, and by 75-125 bps for mid-sized players with higher
exposure to semi-regulated markets. Bulk drug exporters (with close to 90% export revenues) are likely to
see the highest EBITDA margin expansion (close to 150-200 bps).
CLOTHIERS ON A GOOD RUN
The readymade garments sector is expected to see dollar revenue growth of close to 4-5% compared with a
decline of nearly 6% in FY13, led by improved demand in the US. Domestic revenues are expected to grow
nearly 5% on the back of buoyant rural demand, driven by higher incomes due to the good monsoon. EBITDA
margins of exporters are likely to rise close to 200 bps on the rupee fall, while those of domestic-focused
companies will improve 200-250 bps because the excise duty cut effected in March 2013 is unlikely to be
passed on to consumers.
CHINA LIFT FOR COTTON YARN SPINNERS
Cotton yarn spinners could see volume growth of nearly 10% after an almost 13% increase in FY13. This will
be driven by continued healthy exports to China expected to grow about 30% in FY14. EBITDA margins can
expand 200 bps driven by the nearly 10% increase in cotton yarn prices (due to strong export demand and a
weak rupee).
TRACTORS, TWO-WHEELERS CRUISE
The tractors segment should see a healthy 16% growth in volumes on account of good monsoon. EBITDA
margins can improve nearly 100 bps led by an increase in capacity utilisation. Two-wheeler segment
volumes are likely to rise by a modest 4-6% on the back of rural demand, while urban demand could stay
weak. EBITDA margins are expected to remain flat.
MELODIOUS RING FOR TELECOM
The telecom sector is expected to see a healthy growth of 7-9% in average revenue per user (ARPU) in
FY14, led by waning competitive intensity, which will improve the industry's pricing power. EBITDA margins
are expected to rise 50-100 bps on account of improved realisations, despite rising diesel costs.
13
STATE OF THE NATION
GUSHER FOR PRIVATE OIL PRODUCERS
Private sector oil producers, led by Cairn India, could see strong growth in realisations on the back of the
rupee's fall and high crude oil prices (Brent crude is expected to average $105-110 per barrel this fiscal).
However, due to continued high under-recoveries, the subsidy-sharing burden of public sector oil producers
such as ONGC and Oil India is expected to remain high at nearly 50% of total under-recoveries, which will
offset realisation benefits to a large extent. Refining companies will do well because the weak rupee will boost
realisations (domestic realisations are based on import parity, whereas export realisations are in dollar
terms). Gross refining margins would remain a healthy $6-7 per barrel this fiscal.
FEEBLE GROWTH IN POWER DEMAND
Power sector demand is seen growing a modest 4.7% due to weak industrial demand and offtake risk on
account of poor health of state discoms. The plant load factors of thermal plants are expected to decline 200
bps to 68%, led by weak demand and limited fuel availability for some plants. High interest costs and high
imported coal costs due to the depreciation of the rupee will result in continued pressure on profitability.
CEMENT CRACKING UP
The cement sector is expected to see muted volume growth of close to 2.5%, despite improved rural demand
and some pre-election government spending. EBITDA margins could decline 300-350 bps on account of
muted realisations, higher fuel and freight costs.
STEEL SUBDUED
Steel sector volumes are expected to grow a muted 2-3% due to weak demand from construction,
automobiles and consumer durables sectors. Capacity utilisation rates are expected to fall by around 1000
bps as over 15 million tonnes of capacity is likely to come on stream in the current year. Indian manufacturers
are unlikely to benefit from a weaker rupee as fragile domestic demand and high inventory levels will
constrain pricing power. EBITDA margins of most companies could decline 100-200 bps. High interest outgo
(due to leveraged balance sheet of most companies in the sector) will exert further pressure on net profit
margin.
OIL MARKETERS ON SKID ROW
Public sector oil marketing companies continue to be saddled with high under-recoveries (estimated Rs 1.4-
1.5 trillion for this fiscal) despite the hike in regulated fuel prices. The profitability of these companies is, thus,
contingent upon the government's decision on subsidy sharing. Working capital is expected to remain
strained due to delayed subsidy reimbursements. Overall growth in sale of petroleum products is expected to
be weak (around 2.4% compared with 4.7% in FY13) due to rising prices and weak economic outlook. Diesel,
which accounts for close to 45% of overall domestic petroleum product consumption, is expected to grow at
just 2% compared with nearly 5-6% in FY13, due to rising prices and slowing economic activity.
AUTO COMPONENTS IN SLOW LANE
Auto component segment revenues are expected decline by close to 2% after a 2-4% growth in FY13, led
primarily by a drop in sales to original equipment manufacturers (OEMs). EBITDA margins are expected to
fall nearly 50 bps on account of pressure on volumes and aggressive bargaining by OEMs.
THE BAD
14
THE UGLY
CONSTRUCTION CAUGHT IN LIQUIDITY PINCER
Construction sector revenues will grow at a tepid 2-4%, led by the continued decline in fresh order inflows
and slower execution of existing orders due to policy bottlenecks, high interest costs, leveraged balance
sheets of many project developers and slowing demand. Profitability is expected to remain under pressure
with EBITDA margins expected to decline by around 50 bps. Continued high working capital requirements
and high interest costs are expected to result in severe pressure on bottomline.
DOUBLE BLOW FOR REALTORS
For the real estate sector, the economic slowdown and high capital values have dealt a double blow to
affordability by impacting both income and cost. Demand for residential real estate across the 10 major cities
of India is expected to decline around 6% on a y-o-y basis in calendar 2013 and a further 4% in calendar
2014. Despite declining transaction volumes, capital values have held up so far. In future, however, a
continued decline in demand and rising inventories will force developers to reduce capital values. CRISIL
expects a 5% correction by December 2013 and a further decline of 6-7% in calendar 2014. Mumbai and the
National Capital Region will see the maximum decline in demand (8% and 10%, respectively) in 2013 over
calendar 2012. Leveraged balance sheet and constraints on funding will exacerbate the effect of demand
slowdown.
TRUCK MAKERS HIT A SNARL
For commercial vehicle manufacturers, weak freight movement and continued slowdown in infrastructure-
related demand is likely to result in an 8-10% decline in total sales volumes, after a decline of nearly 2% in
FY13. Medium to heavy commercial vehicle volumes are expected to slip 10-15% on the back of a 26% fall in
FY13. Light commercial vehicle volumes are expected to drop 8-10% after growing at a healthy 16% in FY13
due to slowing freight movement and weak fleet utilisation rates. EBITDA margins are expected to decline
over 200 bps on a very low base of 4.4% in FY13.
CARS, UTILITY VEHICLES IN REVERSE GEAR
Cars & utility vehicles segment volumes are expected to decrease 8-11% on account of weak consumer
sentiment due to growing uncertainty about income growth, high interest rates, rising fuel prices and increase
in excise duty on utility vehicles.
11 15
STATE OF THE NATION
16
This page is intentionally left blank
How Vulnerable
is India Inc?
17
STATE OF THE NATION
In difficult times, how does one assess corporate vulnerability? By weighing them on stress factors. We
zeroed in on five demand pressure, liquidity and working capital challenges, extent of indebtedness,
ability to service debt (interest cover), and foreign currency volatility, and studied their effect on 2,481
firms to arrive at our conclusion.
But why these firms? Because they are the ones CRISIL has rated as investment grade (BBB- or above). In
terms of financial footprint, they account for about 32% of banking credit to corporates and 82% of CRISIL-
rated debt.
Less than
Rs 2.5 bn
61%
Between Rs 2.5 bn
and Rs 10 bn
27%
Greater than
Rs 10 bn
12%
Size-wise (operating income) proportion of 2,481 firms assessed by CRISIL
Source: CRISIL
0 50 100 150 200 250 300 350 400 450
Consumption-related
Infrastructure
Capital goods
Automobiles & components
Metals & mining
Trading
Textiles
Health care & pharmaceuticals
Chemicals
Real estate
Gems & jewellery
Packaging and paper products
Education
Building products and construction materials
Transportation
Fertilisers & agricultural chemicals
Software & services
Media
Technology, hardware & equipment
Commercial & professional services
Energy
Diversified
Sector-wise proportion of 2,481 firms assessed by CRISIL
Note: Consumption-related sectors include companies in industries such as food and beverages, FMCG, apparel,
consumer durables, edible oil, home furnishing, leather and office equipment.
Source: CRISIL
18
These have turnovers as low as Rs 6 crore, while the largest one has Rs 465,000 crore. They traverse more
than 20 sectors with no sector accounting for more than 16% of the total firms. This diversity is what makes
the study the most comprehensive done to date on the vulnerability of India Inc. A note is in order: this study
does not cover 10,000 firms rated sub-investment grade (BB and lower). Sure, they would display higher
vulnerability, but their financial footprint is just 18% of the total CRISIL-rated debt.
FOREX VOLATILITY IMPACTING VERY SMALL PORTION OF CRISIL-RATED FIRMS
Despite a significant depreciation of the rupee over the last few months, only 6% of the 2,481 firms are
displaying high vulnerability to foreign currency volatility. Notably, the study does not include some of the
major corporate houses that have large foreign currency exposures such as Essar, GMR, GVK, JSW,
Jaypee and Videocon. CRISIL does not have ratings on most companies from these groups and hence, our
analysis does not incorporate them.
PHARMA, SOFTWARE AMONG LEAST IMPACTED
Only 8% of the pharmaceuticals and healthcare firms and 14% in software show high vulnerability to two or
more sources of stress.
LIQUIDITY PRESSURES IMPACTING A SIXTH OF FIRMS
While liquidity pressures present a high source of vulnerability for 16% of the 2,481 firms, they are more
acute for the larger firms (operating income in excess of Rs 1,000 crore). The slowing economy has led to a
piling up of inventory and receivables, resulting in liquidity stress for slightly over a fourth of the big firms. It
has also engendered refinancing pressures for firms where net cash accruals are likely to be insufficient to
service term-debt repayments for about a fifth of the larger-sized firms.
METALS & MINING, FERTILISERS, AGROCHEM IN LINE OF FIRE
As many as 23% of firms in the metals and mining industry show vulnerability to two or more sources of
stress, primarily emanating from slowing demand. Around 19% in the fertilisers and agro-chemicals industry
show vulnerability to two or more sources of stress, chief of which is the stretched liquidity.
DEMAND SLOWDOWN MOST IMPORTANT SOURCE OF STRESS
Almost a quarter of the firms assessed by CRISIL show high vulnerability to the slowdown in demand. On the
other hand, stress on operating profitability and financing cost, which lead to stress on interest cover, affect a
fifth.
LARGER FIRMS HAVE TO BEAR MORE
As many as 36% of the larger firms (with operating income of more than Rs 1,000 crore) have displayed
vulnerability to two or more sources of stress, chief of them being challenges due to higher level of
indebtedness and increasing stress on operating profitability and financing cost (interest coverage).
THE GOOD
THE BAD
THE UGLY
19
STATE OF THE NATION
GREATER VULNERABILITY FOR REALTY, INFRA, AUTO, TRANSPORT, CAPITAL GOODS
The proportion of firms from these sectors that have displayed vulnerability to at least two sources of stress
ranges from 25% to 36%. While high indebtedness, stretched liquidity and pressure on interest cover are
impacting the real estate and infrastructure adversely, demand pressures and consequent pressures on
liquidity are impacting auto components and transportation. Capital goods companies are plagued by
demand slowdown on account of lack of investment demand in the economy, which is also impacting their
interest cover adversely.
18%
20%
36%
33% 28%
30%
49%
52%
34%
0%
20%
40%
60%
80%
100%
Less than Rs 2.5 bn Between Rs 2.5 bn and
Rs 10 bn
Greater than Rs 10 bn
Two or more stress factors Only one stress factor None
Size-wise (operating income) break-up of firms facing high vulnerability in 2 or more factors
Source: CRISIL
20
Key Findings

from an analysis of 2,481 firms rated
investment grade and above by CRISIL
21
STATE OF THE NATION
SLOWING DEMAND IS THE BIGGEST STRESS, FOREX THE SMALLEST
Based on the framework of vulnerability analysis and the methodology followed, CRISIL found that demand
slowdown is the biggest source of vulnerability, while foreign exchange is the smallest. Almost a fourth of the
2,481 companies show high vulnerability to slowing demand, while financing cost (interest cover) is a high
vulnerability issue for a fifth.
Despite the huge depreciation in the rupee over the last few months, only 6% of the firms were identified as
being highly vulnerable due to forex exposure, with the primary stress emanating from forex-denominated
debt. Our analysis indicates that companies which had significant forex debt in their books either have a
'natural hedge' through high level of forex-denominated earnings or their balance sheets are strong enough
to mitigate the stress emanating due to the sharp currency depreciation.
For the firms analysed, some of the key conclusions are:
n Aggregate forex-denominated debt stood at about $100 billion as on March 31, 2013, which is about
50% of the total corporate forex debt in India.
n The debt is concentrated in a few firms, with the top 1% accounting for more than 85% of it.
n Total unhedged forex exposure was estimated at about $98 billion after considering forex
denominated debt and netting of natural hedge available due to forex-denominated trade
receivables/payables and active hedges.
The analysis covers only half of the total corporate forex debt in the country, and does not include some of the
major corporate houses that have large foreign currency exposures, such as Essar, GMR, GVK, JSW,
Jaypee and Videocon. CRISIL does not have ratings on most companies from these groups and hence our
vulnerability analysis does not incorporate these companies.
Source-wise vulnerability assessment of firms
25% of the
firms have
been
assessed as
displaying
'high'
vulnerability
to demand
slowdown,
whereas only
6% of the
firms are
identified as
being highly
vulnerable to
forex stress
High
Medium
Low
Total
Liquidity risk
16%
56%
28%
100%
TOL/TNW
16%
4%
81%
100%
Interest cover
20%
11%
69%
100%
Assessment on each source of stress
% of total
Demand assessment
620
1,084
777
2,481
Forex risk
160
192
2,129
2,481
Liquidity risk
402
1,393
686
2,481
TOL/TNW
386
87
2,008
2,481
Interest cover
488
269
1,724
2,481
High
Medium
Low
Total
Demand assessment
25%
44%
31%
100%
Forex risk
6%
8%
86%
100%
Source: CRISIL
22
21% FIRMS IMPACTED BY MULTIPLE SOURCES OF STRESS
The analysis revealed that about 21% of the firms have two or more sources of stress assessed in the high-
vulnerability category. One can further delve into the type of firms that were assessed, based on their size
(operating income) or the industry to which they belonged.
LARGER COMPANIES FACING MORE CHALLENGES THAN SMALLER ONES
Larger firms (with operating income of over Rs 1,000 crore) seem to be facing more challenges than the
smaller ones (with operating income of less than Rs 250 crore). Around 36% of the larger firms have two or
more sources of stress compared with only 18% for the smaller firms.
Larger firms Smaller firms
25%
34%
27%
34%
26%
18%
15%
12%
6% 7%
Demand stress
Ability to service debt (interest cover)
Liquidity stress
Extent of indebtedness
Forex stress
Larger firms Smaller firms
26% 22%
13% 11%
21% 11%
GCA as days of op income
Capex/ networth
NCA/CPLTD
Size-wise break-up of firms facing high vulnerability on different stress factors
Source: CRISIL
21%
31%
48%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
None
Only one
stress factor
Two or more
stress factors
31%
48%
Proportion of firms facing high stress in 2 or more factors
Source: CRISIL
23
STATE OF THE NATION
For the larger firms, high level of indebtedness and increasing stress on financing cost (interest cover) were
the two major sources of vulnerability, each impacting around 34% of the firms. These were closely followed
by stretched liquidity, impacting around 27% of the firms.
On the other hand, slowing demand was the single major source of vulnerability impacting the credit profile of
smaller firms, with 26% scoring a 'high' on this factor. This was followed by interest cover and liquidity
vulnerabilities, with 18% and 15% of the firms, respectively, scoring a 'high'.
Extended working capital cycle is the major reason for the exaggerated liquidity vulnerability that was
identified as the third major source for both large and small firms. Around 26% of the larger firms and around
22% of the smaller ones scored a 'high' on gross current asset (GCA) days. The increase was primarily led by
a stretch in receivables.
REALTY, INFRA, AUTO, TRANSPORT, CAP GOODS AMONG WORST-HIT
The real estate sector has the highest proportion of firms (36%) where at least two sources of stress have
scored a 'high', followed by infrastructure (30%), automobiles (28%), transportation (25%) and capital goods
(24%). On the other hand, education (3%), healthcare and pharmaceuticals (8%) have the least proportion
of firms where at least two sources of stress have been scored 'high'.
0% 5% 10% 15% 20% 25% 30% 35% 40%
Real estate
Infrastructure
Automobiles & components
Transportation
Capital goods
Gems & jewellery
Metals & mining
Fertilisers & agricultural chemicals
Building products and construction
Consumption-related
Textiles
Chemicals
Software & services
Packaging and paper products
Health care & pharmaceuticals
Education
Sectoral break-up of firms facing vulnerability in 2 or more stress factors
Source: CRISIL
24
Methodology,
Other Insights
25
STATE OF THE NATION
Annexure 1
Vulnerability analysis
THE 5 YARDSTICKS
CRISIL analysed the companies based on five sources of stress and classified their vulnerability into high,
medium and low. The sources of stress are:
1 Demand pressures
2 Liquidity and working capital challenges
3 Extent of indebtedness (total outside liabilities/ tangible networth)
4 Ability to service debt (interest cover), and
5 Foreign currency volatility
DEMAND PRESSURES
While classifying the firm's vulnerability to demand pressures, CRISIL has assessed the expected revenue
growth in relation to the recent past (2-3 years). Firms whose performance is expected to be materially lower,
flat or witness a decline in revenue growth are classified as displaying 'high' vulnerability to demand
pressures, while firms which are likely to display similar or better growth are classified as displaying 'low'
vulnerability.
LIQUIDITY PRESSURES
Liquidity assessment was based on three parameters:
1 Net cash accruals vis--vis term debt repayments (NCATDR)
2 Gross current assets (GCA; adjusted for surplus cash)
3 Planned capital expenditure (Capex) vis--vis networth
NCATDR
Indicates the buffer in a firm's cash accruals in relation to the upcoming term debt repayments; higher the
buffer, lower is the firm's vulnerability to liquidity pressures.
GCA
Slowdown adversely impacts a firm's sales, which results in a piling-up of inventory or stretch in receivables
and thus increase in the GCA. Higher the GCA, longer is the cash conversion cycle and hence greater is the
firm's vulnerability to liquidity pressures.
CAPEX VIS--VIS NET WORTH
In the current scenario of tight liquidity, firms will find it tough to raise funds both debt as well as equity.
Hence, firms with committed capex requirements will rely heavily on internal accruals to fund the capex,
which could strain its liquidity. Higher a firm's committed capex, greater is its vulnerability to liquidity
pressures.
EXTENT OF INDEBTEDNESS
This is reflected in the ratio of total outside liabilities as a proportion of tangible networth (TOL/TNW). Higher
the ratio, higher is the firm's external indebtedness, which increases the vulnerability of the firm's financial
risk profile, given the weak economic environment.
26
ABILITY TO SERVICE DEBT (INTEREST COVER)
Interest cover is an indicator of the buffer available in the company's operating profit in relation to the
servicing of interest and finance costs. Lower the interest cover, lower is the buffer and hence higher is the
firm's vulnerability to profitability pressures and to increase in financing costs.
FOREIGN CURRENCY VOLATILITY
CRISIL has created a comprehensive framework, which includes forex-denominated debt, receivables and
payables, as well as forex derivative positions, to arrive at a firm's overall forex exposure. We have
computed value at risk (VaR) by using a forex variation of 10% for short-term exposures and 20% for long-
term exposures. This VaR is compared to the firm's net profit and networth. Higher the VaR in relation to the
firm's PAT and networth, higher is its vulnerability to forex variations.
27
STATE OF THE NATION
Annexure 2
No. of firms that have scored a high under different sources
of stress based on size of operating income
Larger firms
are more
vulnerable
than smaller
ones about
36% of firms
with revenue
greater than
Rs 1,000 crore
have two or
more of the
factors scored
in the high-risk
category
Less than Rs 250 crore
Condition
>3
3
2
1
0
Total
>=2
Count
18
67
192
498
733
1,508
277
Percentage
1%
4%
13%
33%
49%
100%
18%
Between Rs 250-1,000 crore
Condition
>3
3
2
1
0
Total
>=2
Count
9
35
92
185
344
665
136
Percentage
1%
5%
14%
28%
52%
100%
20%
Greater than Rs 1,000 crore
Condition
>3
3
2
1
0
Total
>=2
Count
19
37
54
93
105
308
110
Percentage
6%
12%
18%
30%
34%
100%
36%
Break-up of firms based on size of operating income and sources of stress
For larger firms,
level of
indebtedness
(TOL/TNW) is
the major
source of stress
vulnerability
from this was
'high' for 34% of
the larger firms.
Due to high
leverage,
pressure on
financing cost
(interest
coverage) is
another major
source of stress
impacting
similar
proportion of
firms
Less than Rs 250 crore
Demand assessment
391
660
457
1,508
26%
Forex stress
89
99
1,320
1,508
6%
Liquidity stress
219
904
385
1,508
15%
TOL/TNW
183
44
1,281
1,508
12%
Interest cover
274
143
1,091
1,508
18%
Between Rs 250-1,000 crore
Demand assessment
153
310
202
665
23%
Forex stress
50
56
559
665
8%
Liquidity stress
100
341
224
665
15%
TOL/TNW
99
29
537
665
15%
Interest cover
109
86
470
665
16%
Greater than Rs 1,000 crore
Demand assessment
76
114
118
308
25%
Forex stress
21
37
250
308
7%
Liquidity stress
83
148
77
308
27%
TOL/TNW
104
14
190
308
34%
Interest cover
105
40
163
308
34%
High
Medium
Low
Total
High%
High
Medium
Low
Total
High%
High
Medium
Low
Total
High%
Source: CRISIL
Source: CRISIL
Other insights from vulnerability analysis
28
29
This page is intentionally left blank
Sector-wise break-up of firms displaying 'high' vulnerability to different sources of stress
Source: CRISIL
Sectors such as
real estate (36%),
infrastructure(30
%) and
automobiles
(28%) have
highest
proportion of
firms where they
have displayed
'high'
vulnerability to at
least two sources
of stress
Automobiles
& components
Building
products and
construction
materials
Capital
goods
Chemicals
Commercial &
professional
services
Consumption
related
Diversified Education Energy
Fertilizers &
agricultural
chemicals
Healthcare &
pharmaceuticals
Infrastructure Media
Metals
& mining
Packaging
and paper
products
Real
estate
Software
& services
Technology
hardware
& equipment
Trading Transportation
0
2
11
26
30
69
19%
3
3
12
24
80
122
15%
0
1
1
11
14
27
7%
4
17
46
95
223
385
17%
1
1
0
6
5
13
15%
0
0
2
18
56
76
3%
0
3
3
6
8
20
30%
0
5
4
8
30
47
19%
0
0
10
28
95
133
8%
0
2
8
8
15
33
30%
1
8
26
54
61
150
23%
1
2
7
22
46
78
13%
0
0
5
8
22
35
14%
1
1
2
15
14
33
12%
4
7
25
52
52
140
26%
0
2
10
14
22
48
25%
0
4
15
23
38
80
24%
13
20
39
109
115
296
24%
Gems &
jewellery
>3
3
2
1
0
Total
Proportion of firms
displaying 'high'
vulnerability to at
least two sources of
stress as % of total
5
15
28
49
77
174
28%
11
31
49
127
84
302
30%
0
8
21
34
17
80
36%
Textiles
2
7
14
39
78
140
16%
STATE OF THE NATION
30
Sector-wise break-up of firms displaying 'high' vulnerability to different sources of stress
Source: CRISIL
Sectors such as
real estate (36%),
infrastructure(30
%) and
automobiles
(28%) have
highest
proportion of
firms where they
have displayed
'high'
vulnerability to at
least two sources
of stress
Automobiles
& components
Building
products and
construction
materials
Capital
goods
Chemicals
Commercial &
professional
services
Consumption
related
Diversified Education Energy
Fertilizers &
agricultural
chemicals
Healthcare &
pharmaceuticals
Infrastructure Media
Metals
& mining
Packaging
and paper
products
Real
estate
Software
& services
Technology
hardware
& equipment
Trading Transportation
0
2
11
26
30
69
19%
3
3
12
24
80
122
15%
0
1
1
11
14
27
7%
4
17
46
95
223
385
17%
1
1
0
6
5
13
15%
0
0
2
18
56
76
3%
0
3
3
6
8
20
30%
0
5
4
8
30
47
19%
0
0
10
28
95
133
8%
0
2
8
8
15
33
30%
1
8
26
54
61
150
23%
1
2
7
22
46
78
13%
0
0
5
8
22
35
14%
1
1
2
15
14
33
12%
4
7
25
52
52
140
26%
0
2
10
14
22
48
25%
0
4
15
23
38
80
24%
13
20
39
109
115
296
24%
Gems &
jewellery
>3
3
2
1
0
Total
Proportion of firms
displaying 'high'
vulnerability to at
least two sources of
stress as % of total
5
15
28
49
77
174
28%
11
31
49
127
84
302
30%
0
8
21
34
17
80
36%
Textiles
2
7
14
39
78
140
16%
31
STATE OF THE NATION
32
Notes
Notes
33
STATE OF THE NATION
Notes
34
About CRISIL Limited
CRISIL Privacy Notice

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services.

We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest
banks and leading corporations. With sustainable competitive advantage arising from our strong brand, unmatched
credibility, market leadership across businesses, and large customer base, we deliver analysis, opinions, and
solutions that make markets function better.

Our defining trait is our ability to convert data and information into expert judgements and forecasts across a wide
range of domains, with deep expertise and complete objectivity.

At the core of our credibility, built up assiduously over the years, are our values: Integrity, Independence, Analytical
Rigour, Commitment and Innovation.
CRISIL's majority shareholder is Standard and Poor's(S&P). Standard & Poor's, a part of McGraw Hill Financial, is
the world's foremost provider of credit ratings.
CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request
and service your account and to provide you with additional information from CRISIL and other parts of McGraw Hill Financial
you may find of interest.
For further information, or to let us know your preferences with respect to receiving marketing materials, please visit
www.crisil.com/privacy. You can view McGraw Hill Financial's Customer Privacy Policy at http://www.mhfi.com/privacy.
Last updated: May, 2013
Stay Connected
/CRISILLimited /CRISILLimited /CRISILLimited /in/CRISILLtd
Roopa Kudva
Managing Director & CEO
CRISIL Ltd
Arun Panicker
Chief Analytical Officer
CRISIL Ratings
Mukesh Agarwal
President
CRISIL Research
Dharmakirti Joshi
Chief Economist
CRISIL Ltd
Prasad Koparkar
Senior Director
CRISIL Research
Somasekhar Vemuri
Director
CRISIL Ratings
Raj Nambisan
Director - Editorial
CRISIL Ltd
CRISIL Limited
CRISIL House, Central Avenue
Hiranandani Business Park, Powai, Mumbai - 400 076. India
Phone: +91 22 3342 3000 | Fax: +91 22 3342 3001
www.crisil.com
Authored by