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Acuite assigns 'BB-/Stable' rating to Jagatjit Industries' long-term facilities; Stock trades flat

The rating positively factors in the growing food business through company's partnership with Hindustan Unilever.

October 13, 2021 2:54 IST | India Infoline News Service
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Acuité has assigned the long term rating of ‘ACUITE BB-’ (read as ACUITE double B minus) on the Rs200cr bank facilities of Jagatjit Industries Limited (JIL). The outlook is ‘Stable’.

The rating assignment takes into account its established track record of the promoters in the AlcoBev Industry. 

Further, the rating positively factors in the growing food business through their partnership with Hindustan Unilever (HUL) which is one of the major players in the FMCG industry.

The rating, however, is constrained by the high tenant risk in lease rental business as the entire facility has been leased out to few tenants, though a strong tenant profile reduces the risk to some extent. Availability of new tenant for vacant space due the ongoing Covid-19 pandemic remains an important concern.

Overall the operational and financial performance has been improving on yoy basis while currently remain average. Moreover, the rating continues to be constrained by the highly regulated nature of the industry as well as the high level of duties and taxes that result in the vulnerability of sales volume and profitability to any adverse change in the duty structure.

At around 2:53 PM, Jagatjit Industries was trading flat at Rs68 apiece on the BSE.

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