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Fitch: Winners and Losers if the Indian Rupee Depreciates Further
November 16, 2015 / 7:08 AM / 2 years ago

Fitch: Winners and Losers if the Indian Rupee Depreciates Further

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Winners and Losers if the Indian Rupee Continues to Fall here SYDNEY/SINGAPORE, November 16 (Fitch) Fitch Ratings, in a special report published today, highlights those Indian corporates whose financial profiles could strengthen or weaken if the Indian rupee were to depreciate by 15% and 30%. Fitch specifically highlights nine Indian corporates whose financial profiles would deteriorate and - conversely eight corporates that are likely to benefit. Hindustan Petroleum Corporation Limited, Indian Oil Corporation Ltd and Adani Ports and Special Economic Zone Limited will benefit the most from the rupee's depreciation as their dollar earnings are sufficient to more than offset the negatives of higher debt and capex in dollar terms. However, Power Grid Corporation of India Ltd, NTPC Limited, Bharti Airtel Limited and Lodha Developers Private Limited tick all three negative boxes of minimal earnings in dollars, dollar-denominated debt and dollar-denominated capex. The report examines the impact of currency depreciation on both balance sheet and cash flow, and shows the resultant impact on net leverage (adjusted net debt/operating EBITDAR) for each corporate under both 15% and 30% currency depreciation scenarios. We then compare the results against our official negative rating triggers (for those corporates where we have assigned leverage rating triggers). From a balance-sheet perspective, most Indian corporates will be negatively affected due to their exposure to foreign-currency debt. However, at the EBITDAR level, we do not expect any Indian corporate to be negatively affected by a lower rupee, and in fact anticipate that 14 corporates will experience higher EBITDAR, thanks to US dollar-based revenues and limited cost increases. At the cash flow level, we estimate that the negative of higher capex in dollar terms, will not negate the positive benefit of higher EBITDAR for most corporates. "Winners and Losers if the Indian Rupiah Continues to Fall" is available from or by clicking on the link in this media release. Contact: Matt Jamieson Head of APAC Research +61 2 8256 0366 Fitch Australia Pty Ltd. Level 15, 77 King Street Sydney NSW 2000 Nitin Soni APAC TMT Ratings +65 6796 7235 Muralidharan Ramakrishnan APAC Industrial Ratings +91 22 4000 1732 Akash Gupta APAC Energy and Utilities Ratings +65 6796 7242 Hasira De Silva APAC Industrial Ratings +65 6796 7240 Rachna Jain APAC Energy and Utilities Ratings +65 6796 7227 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email:; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: Additional information is available on ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Fitch Australia Pty Ltd holds an Australian financial services licence (AFS licence no. 337123) which authorises it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001.

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