India’s TOP 500 Companies 2020

INDIA’S TOP 500 COMPANIES 2020 89 Surge in fuel group inflation exert upward pressure on WPI inflation in FY19 0 1 2 3 4 5 6 -10 -5 0 5 10 15 20 % % Fuel WPI - infl ation (RHS) Source: Ministry of Commerce In view of eased inflationary pressures, stable global crude oil price outlook and moderating growth, the RBI reduced the policy repo rate by 25 bps towards the end of FY19 from 6.5% as of August 1, 2018. The RBI’s monetary policy stance continued to remain accommodative during FY20 and thereafter owing to weakening growth impulses and the macroeconomic risks brought on by the COVID-19 pandemic. The credit offtake remained buoyant during H2 FY19 owing to lowering of interest rates on fresh loans by banks. However, growth in credit-offtake moderated thereafter due to resurgence in risk aversion amongst banks amidst slowing economy and weak demand for credit. Bank credit that witnessed double digit growth of 13.6% in FY19 moderated substantially to 9.4% in FY20 given the deceleration in credit-offtake across the board. Growth in non-food credit moves downward in FY20 0 2 4 6 8 10 12 14 16 18 % deposit Non-food credit Source: Ministry of Commerce On the external front, exports that had remained resilient in FY19, plunged 5% y-o-y in FY20 due to subdued global demand amidst slowing global economy and increased protectionist policies in the global trade. Imports followed suit, in fact showing a sharper decline in FY20 led by a fall in global crude oil prices and muted domestic demand, leading to narrowing of merchandise trade deficit. The Indian rupee depreciated consistently in H1 FY19 due to higher global crude oil prices and rise in foreign capital outflows. However, in H2 FY19, softening of global crude oil prices provided some respite to the rupee. In FY20, the rupee continued to remain weak due to rising domestic & global growth concerns as well as volatility in the global financial markets. Dun & Bradstreet