Reliance Industries Eyes Rating Boost with Non-Energy Growth
Reliance Industries Ltd could see an upgrade in its credit rating if it maintains lower leverage and boosts revenue from non-energy segments, according to S&P Global Ratings. A recent improvement in India's sovereign rating has already led to upgrades across the industry, providing potential upside for Reliance.
- Country:
- India
Reliance Industries Ltd might see an improvement in its credit rating, contingent on maintaining lower financial leverage and increasing earnings from non-energy sectors, S&P Global Ratings announced this Tuesday.
Following last week's enhancement in India's sovereign rating to 'BBB/A-2', S&P raised Reliance's issuer credit ratings alongside companies like ONGC and NTPC from 'BBB-' to 'BBB'. The stable outlook anticipates strong cash flows and cautious spending from Reliance over the next one to two years.
The rating could further escalate if Reliance sustains a debt-to-EBITDA ratio well below 2x and enhances its revenue from less volatile non-energy sectors. Conversely, increasing capital expenditure or diminished cash flow could lead to a downgrade if the debt-to-EBITDA ratio exceeds 2.5x.
(With inputs from agencies.)
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