The occupancy for ICRA’s sample set in the hospital industry is expected to remain healthy at 62-64% in FY2023 and FY2024 backed by healthy demand for elective surgeries, recovery in medical tourism, and continued market share gains for organised players. Improving payor mix, growth in surgery volumes and price revisions by companies are expected to aid healthy growth of ~8-10% in ARPOB in FY2023. This translates to healthy revenue growth of ~15-17% in FY2023. Despite high input cost inflation, operating leverage, and continued cost optimisation measures are expected to support healthy operating margin of ~20-22% in FY2023 and FY2024.
Accelerated pace of business activities and healthy demand across various sectors to drive the revenue growth in FY2023 for the road logistics sector, with the sector likely to grow at ~11-13% in FY2023 over FY2022, ICRA expects the aggregate operating profit margins for the sector to be in the range of 12-14% in FY2023. Debt coverage metrics is expected to marginally moderate in FY2023 and FY2024 compared to FY2022 levels owing to expected debt-funded capital expenditure for vehicle replacement capex induced by the scrappage policy along with the rising interest rate regime.
Infrastructure and construction remain the largest end-user of steel accounting for over 60% of the domestic demand. In the current fiscal, for the very first time, the Central and State Government’s combined capex spend is budgeted to touch the average annual run-rate of around Rs. 14.5 lakh crore targeted in the National Infrastructure Pipeline. Going forward, maintaining the momentum in the Government’s capex drive will be a key factor which can partly insulate the domestic steel industry from the full effect of the ongoing global growth slowdown.
ICRA expects the profitability for non-banks (including NBFCs and HFCs) to improve from the levels seen in FY2022 and reach pre-Covid levels in FY2023. This improvement is expected to be an interplay of higher growth in AUMs, and moderation in asset quality indicators and controlled credit costs. ICRA has revised the growth outlook for NBFC-HFC to 10-12% for FY2023. Within this, NBFC-Retail is expected to grow at a rate of 12-14% while HFCs could grow at 10-12%. The asset quality indicators for these non-banks have been improving steadily since December 2021 on the back of higher collections, lower-than-anticipated share of restructured portfolio and controlled slippages, in addition to a favourable base effect of high growth. On the profitability front, stable NIMs along with moderation in credit costs will support the improvement in profitability indicators for non-banks and ICRA expects these entities to report a return on managed assets (RoMA) of 2.6-2.9% for FY2023.
The Indian Renewable Energy developers have relied on international bond markets to diversify their funding sources, raising green bonds aggregating to USD 15.5 billion since 2014. However, the rising interest rates globally have led to a slowdown in the bond issuances post March 2022. Moreover, the refinancing of maturing green bonds over the next two years of over USD 3 billion is likely through domestic debt. In this context, availability of adequate domestic financing avenues remains important.
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