I second your point. I think the market is still overlooking the potential of CARE going forward in a high capex, high credit offtake kind of environment.
PSBs haven’t been lending & corporates haven’t been borrowing since the profit cycle had yet to pick up. And now there are definite signs of earnings growth.
Plus NCLT resolutions are picking up pace & with fresh recapitalisation, PSBs balance sheets should become healthy enough to lend again.
All this focus on further improving “Ease of Doing Business” in the country, bond market reforms bodes well for CRAs.
The only truant will be further rate hikes by RBI which will push up the borrowing costs for corporates. But if the economy is strong & earnings growth remains strong, that won’t be a problem.
Perhaps corporates could wait for the election cycle to be complete to remove political uncertainty as well before carrying out fresh capex.
Just now I was reading RBI board meet statement which said RBI will take steps to ease liquidity for financial sector (reduce reserve requirements?) and increase credit to MSMEs.
Disc : Long position