Overview

• ICRA recorded 214 upgrades versus 75 downgrades in H1 FY26, resulting in a Credit Ratio of 2.9x.
• Defaults stayed low at 0.2% with six cases reported, including one investment‑grade NBFC focused on MSME lending that faced liquidity stress after covenant breaches.
• Power, realty and hospitality were major drivers of upgrades, reflecting stronger business fundamentals and lower project risks.
• ICRA warns that a 50% US tariff on many Indian goods threatens exporters in cut and polished diamonds, textiles and seafood, with merchandise exports at risk of a 4–5% YoY contraction if the tariffs persist through March 2026.
• Corporate leverage and liquidity improved over the past decade, with total debt to OPBDITA down to 2.1x and cash plus investments rising to 46% of debt, reinforcing resilience alongside domestic demand supports.