Telecom sector of India received a negative outlook from the Moody's Investors Service, which said that intense competition and heavy debt loads continue to pressure cash flows, ultimately driving consolidation activity towards a three player market.
 
On the other hand Moody's Indian affiliate ICRA has stable outlooks on the passenger vehicle, construction, cement, and textiles sectors. 
 
"ICRA believes the outlook for the passenger vehicle industry remains stable. While demand over the near and medium term is expected to remain robust at 9-11%, supported by favourable demographics, rising competition will limit pricing power," says Anjan Ghosh, Chief Rating Officer for ICRA Limited.
 
According to Moody's, there's a stability in the exploration & production companies, reflecting expectations of stable production volumes, low subsidy burdens and stable oil prices in the country.
 
The rating agency also expects India's steel consumption to grow in the mid-single digits over the next 12-18 months, lower than India's GDP growth of 7.6%, supporting a stable outlook. Consolidation will also rise in the steel sector.
 
"Our stable outlook is underpinned by the expectation that GDP growth of around 7.6% will result in higher sales volumes, which along with new production capacity and stabilizing commodity prices, will support EBITDA growth of 5%-6% over the next 12-18 months," says Laura Acres, Managing Director at Moody's Corporate Finance Group.
 
Acres also said that the further simplification of GST and other structural reforms or improved commodity prices could result in higher EBITDA growth, and provide means for deleveraging for some corporates.
 
Moody's stable outlook on IT services incorporates the expectation that Indian companies will remain in the forefront in offering IT services to the Western economies, weighed against some of the global challenges, especially in terms of H1B visas and the fast-pace of technology change that will require investments or acquisitions.