Revenue and earnings recovery will be uneven for non financial companies: Moody’s
Mumbai: Even as the global economy hopes to recover fast from the Covid pandemic induced disruption it would take longer for non financial companies to stabilise completely. Non financial companies will see uneven recovery in their revenues and earnings a Moody’s report said.
In 2021 the aggregate revenue could touch that of 2019 but earnings before interest tax depreciation and amortisation (EBITDA) would remain low for largest companies.
The report however said that there would be gradual recovery in the largest companies globally in the next year or so. Although most companies would look at raising more debt as they look to stabilise their businesses amidst uncertainty.
A large number of companies globally would also look at raising funds through bonds. As per the report about $ 180 billion were already raised till October end this year.
Aggregate revenue and EBITDA will gradually recover to pre-pandemic level in 2021 but higher debt will lead to slightly higher leverage, the report said.
Aggregate leverage will increase in most regions as per the report. Some sectors in India could beat this trend though, the report added. However, in India, telco and auto companies will underpin leverage decline. Australia’s leverage increase is driven by oil and gas and REITs; in Hong Kong, by REITs. In Japan, the rise in TMT, REIT leverage more than offsets the fall in O&G leverage, the Moody’s report added.