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Crisil rating trends signal industrial upturn

Mumbai, April 7: The manufacturing sector has performed better in the last financial year, according to credit rating agency Crisil.

In its latest Crisil Ratings Round Up, during the 12 months ended March 2003, Crisil’s portfolio of manufacturing firms saw upgrades outnumber downgrades for the first time since 1996. This improvement was led by core industries like steel and automobiles, the rating agency said today.

Roopa Kudva, executive director and chief rating officer at Crisil, said: “The upturn in these sectors was aided, in significant measure, by the positive economic impact of the increased investment in roads this year. Though the ongoing war in Iraq has introduced a new uncertainty in the economic environment, it is likely that the continuing investment in the core sector, especially roads, would provide the much needed traction to the Indian industrial economy over the next two years.”

The improved credit ratio for Crisil’s long-term ratings in the 12 months ended March 2003 comprised a reduction in the number of downgrades to 19 from 38 in 2001-02 and an increase in the number of upgrades to 14 from four.

This was despite the weakness seen in the agricultural sector last year.

Hence, Crisil expects credit fundamentals to remain strong over the next few years barring another poor monsoon or a global economic downturn as a fallout of the war.

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