The ratio of upgrades to downgrades in ratings and credit outlooks by the local units of S&P Global Ratings, Moody’s Investors Service and Fitch Group has improved to 1.2 this quarter, set for the highest level in nearly three years, data compiled by Bloomberg show, reports Bloomberg.

“Local companies are facing fewer downgrades during the second wave of the pandemic than during the first wave as most of them have bolstered their liquidity in the past couple of quarters, thanks to all the pandemic support announced by policymakers,” K. Ravichandran, a deputy chief rating officer at ICRA Ltd, a local unit of Moody’s, was quoted as saying by Bloomberg.

The nascent recovery in Indian firms’ credit quality adds to signs that the pandemic-hit economy may be turning a corner.