Strong domestic demand and government capex are helping most Indian companies grow at a healthy pace while several companies dependent on exports are facing some headwinds, according to credit rating analysis for the first half of fiscal 2024 (H1 FY24) by Crisil and ICRA. During this period, the ratings upgrades-to-downgrades ratio by both credit ratings companies was nearly 2:1, indicating a positive sign for the economy and the corporate sector. Domestic-oriented companies have been experiencing high capacity utilization, but they are being held back from capacity expansion due to high interest rates and an uncertain inflation outlook. Several sectors are expected to face headwinds in terms of operating cash flows or balance sheet strength, while the conditions seem ripe for the private capex cycle to restart in domestic and infrastructure-linked sectors.