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The lockdown which was prompted due to the pandemic has led contraction of Indian economy to 23.9 % for the quarter April to June. As Economy started to reopen,

RBI forecasts a shrinkage of 8.6% of economy for the July-September quarter making the country to officially enter recession after witnessing two consecutive quarters with negative growth of GDP. The country finally sank into a “Technical recession” after witnessing the contradiction of GDP by 7.5%.

As per latest reports from Moody’s the non-financial sector of the country were noted as “Stable” for year 2021 as economy gears up to complete ongoing business demands and it is reported that country can fall recession.

Growth Update

With economy reopening and starting to meet the on growing business demands from year 2020, a Moody’s Analysist has projected a very strong growth in GDP of almost 10.8% for period of April 2021 to March 2022. As the rate of meeting demands improve it is very likely for the Indian economy to land into pre-COVID-19 levels by year end of 2022. Higher earnings and debt reductions will contribute along with few other factors like low interest and availability of capital whenever required will let companies create an impactful account sheet during their operations. The government overall has raised amount to a total of Rs 2.65 Lac cr to comply with factors mentioned. These measures will also be responsible in increasing healthy competition in sectors like manufacturing also increasing job opportunities. While for current year GDP is predicted to contract by 6.5% and expecting to see a growth in 3rd quarter of year 20/21. But the growth has been flagged as delicate due to recent increase in infections in the country and fears of possibility of another lockdown continues to persist.

Sectorial analysis   

Overall 21 Indian companies have been given rates. These companies are throughout sectors mentioned- Oil and gas, telecommunications, mining and car producers and suppliers. At present 6 have been said “Stable” and 14 companies as “negative stable” while Vedanta Resources is still with the reviewing team.

Oil and gas sector will persist to have low earning, low oil prices is a said factor for negative margins and will continue to reflect for prolonged time.

Telecommunication is said to go back to pre-COVID-19 levels due to tariff hike there by increasing the sector revenue as prices may go up again during December 2020. 5G prices are reflected to be expensive which leads the agency to give it as a negative rating for the sector.

Car producers and suppliers may see an increase as the pending demands being met along with the sector may also see entry of new demands during year 2021.

Metal industry is said to increase by small percentage for year 2022 after production began post lockdown.

Mining industry is marked as stable and is projected to have improved conditions for profits for Indian companies as production level rises ramping to better business conditions.

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