Brickwork Ratings has revised and upgraded Bank loan rating of the company to "BWR BBB+" from "BWR BBB" (Triple B plus from Triple B) for fund based facilities. Short term ratings has been also upgraded to BWR A2, as per rationale report.
The ratings upgrade reflects the continued improvement in the business and financial performance of the company in FY21.
The ratings also factor in the enhanced financial risk profile of the company, marked by a sustained improvement in net worth and improvement in profitability leading to improved capital structure and debt protection metrics over the past few years including in H1FY22.
The ratings, however, are constrained by the company’s relatively moderate scale of operations though growing year on year. The ratings are further constrained by customer concentration in revenue, susceptibility to volatility in raw material prices, and exposure to intense competition. BWR has taken note of the planned capex plan of Rs. 24.46 Crs by the company.