MUMBAI, April 8 Loans to Indian truck and bus
operators are showing signs of weakness not seen for three
years, credit rating agency Crisil said, underlining the scale
of the slowdown in India's transportation industry as economic
Repayments on loans by commercial vehicle owners have fallen
significantly over the past year, according to a Crisil report,
raising fears of a rise in non-performing assets (NPAs) as the
industry battles rising fuel costs and slowing freight demand.
"A portfolio analysis of the leading non-banking financial
companies (NBFCs) that lend to the CV segment reveals that
delinquency in near-term buckets is rising," Pawan Agrawal,
Crisil senior director said in a statement.
Sales of medium and heavy goods vehicles in India fell by
about 25 percent in the first 11 months of the financial year
that ended in March, according to industry data, as sluggish
economic growth curbed sales for companies such as Tata Motors
Ltd, Ashok Leyland Ltd and Eicher Motors Ltd
Below-average or deferred loan repayments from the sector
could continue for the next few quarters, Crisil said, likely
leading to a rise in NPAs for lenders.
A protracted slowdown in India's mining industry and
sluggish industrial output growth have compounded the fall in
heavy goods vehicle sales, as company's delay or abandon
upgrades to their fleets.
(Reporting by Henry Foy; Editing by Anand Basu)