S&P Global Ratings said on Tuesday that Indian companies were in “good credit shape” due to strong growth in the country’s economy and accommodative corporate balance sheets.

“By our estimates, aggregate EBITDA in fiscal 2024 will be about 50% higher than five years back for rated corporate and infrastructure entities in India,” S&P said in a note. “Yet aggregate debt is hardly changed, reflecting the improvement in credit quality.”

Rising domestic demand in India and recovery in sectors are more than offsetting negatives, including tough global economic conditions and higher policy and borrowing rates, S&P added.

India’s economic growth is the highest in the region at 6.0% for 2023 and 6.9% in 2024, per S&P forecasts.

The rating agency also said that strong onshore liquidity was mitigating the impact of tough external-funding conditions.

Debt reduction, which was significant over the past three years, will also likely remain a focus for many rated companies, although rising capital expenditure could slow the pace of deleveraging, the rating agency added.

S&P forecasts median debt-to-EBITDA ratio for its rated portfolio will fall to about 2.4 by March 2024 from about 2.7 the year before. That figure stood at 4.3 as of March 2020.