Mumbai: Championing rupee decline to boost exports is doing more harm than good, said a latest report by State Bank of India. While companies, which have resorted to external commercial borrowings are taking a hit on their bottom line, it noted that even export oriented companies, especially in the textile sector has slipped into default category during the last few months.
An analysis of the rating migration of 478 export intensive companies falling under textile, agriculture, leather, automobile, gems & jewellery sector during March to August 2018 revealed that the credit ratio (number of upgrades to downgrades) stood at 0.58 times.
Interestingly, 15 per cent of the companies out of total 478 companies under the study have slipped into default category and most of them are in textile business. Gems & Jewellery and leather are also doing badly,” the report stated.
However, the report added that auto ancillary, pharma (bulk drugs), industrial paper and chemicals (speciality) sector saw maximum upgrades.
In the import intensive industries, the ratio of upgrades to downgrades stood at 0.95 times....