At around 1.44 pm, TBZ stock is trading at Rs26.40 per piece up 6.24% on Sensex.
On TBZ, CRISIL has reaffirmed its rating at 'CRISIL BBB+', however, revised the outlook for bank loan facilities of the company to 'Negative' from 'Stable'.
CRISIL's revision in outlook is derived from the measures taken by the Indian government amid Covid-19 pandemics, such as the temporary closure of non-critical establishments, inter-state transportation, along-with advisory against travel and visiting areas of mass gatherings.
Following the above, CRISIL believes these measures are likely to impact the TBZ business profile of the company as the closure of its retail stores is expected to have a negative impact on business performance and thus impacting its credit quality, especially liquidity position.
CRISIL says, "A sustained long period of closures can result in a significant deterioration in the credit profiles of companies, including TBZ. On the other hand, a faster reversal to normalcy may contain the extent of deterioration likely in the credit quality of firms."
That said, in the note the rating agency added, the ability of the business to revert to operational stability and any relief measures given by the government will be a key monitorable, and CRISIL will continue monitoring these events.
For Q1FY21, CRISIL states the operating performance is expected to be moderated given ongoing store shutdowns, drop in sales as a result of lower footfalls and higher fixed costs in the form of store rentals and salaries.
This will consequently result in lower operating profitability and cash accruals in fiscal 2021 compared to fiscal 2020, explains CRISIL.