CARE Ratings revised long term bank facilities Rs1.117.45cr from Surya Roshni Limited to CARE AA-; Stable from CARE A +; Stable. The credit rating agency also assigned a CARE Al + rating to the company’s short-term bank facilities Rs1,164,32cr.
CARE also reaffirmed the Rs200cr commercial paper rating (carved out) at CARE Al +.
The revision of the ratings assigned to banking facilities and debt instruments takes into account the improvement in the operational performance of the company supported by favorable changes in the industry and business dynamics in the lighting division and a higher contribution value-added products in the Steel Tubes and Strip division, thus leading to better profitability and accrued liabilities and the resulting improvement in debt metrics and liquidity position, a steady reduction in levels of debt, including prepayments in FY21 and the first quarter of FY22, resulting in lower financial costs and stronger financial data.
The ratings continue to be bolstered by the vast experience of its promoters and management and by the company’s long experience in the lighting and steel pipe business with a diverse product profile, operations integrated into its lighting division, a significant market presence in both the segments leveraging an established brand and an extensive nationwide marketing network.
Going forward, the company is expected to report further improvement in its operating performance, which, together with a reduction in working capital intensity, should lead to improved performance ratios.
Surya Roshni Ltd finished at Rs 788.45 per coin, down Rs 37.05 or 4.49% from its previous close of Rs 825.50 per coin on BSE.