Just like Bad Parents destroy the Family, so has the Bad and Corrupt Congress led politicians in the UPA Government which have been lying there in the state of paralysis without taking any decisions for the betterment of the Indian Economy.
The Financial health of India Inc. continues to deteriorate and, in 3Q, our sample of 3,700 companies witnessed a further increase in share of debt with companies. Share of infra and metals continued to be high though other sectors from industrials, such as CRE, IT, energy and pharma, contributed to the stress as well. In 3Q, asset impairments at banks stayed elevated at 4% of loans, and over 10% of bank loans are now NPLs / restructured. However, we believe the large corporate stress is yet to be fully reflected as also borne by continued 20%-plus growth in power and road sector loans.
While the average ticket size of restructuring referrals has moved up to Rs22 bn (from Rs7 bn in FY13), only 10% of top 75 companies’ debts with IC problem loans for the system continue to inch-up and is likely to reach ~11% by year end. We, therefore, continue to be negative on corporate lenders such as SBI, PNB, BOI, BOB, Union, all PSU Banks and ICICI Bank in the private Banking Space.