Rationale report states that the ratings upgrade factors in the improved financial performance in FY2020 and 9MFY 2021, limited competition in the domestic defence ancillary segment.
The ratings continue to draw strength from the experience of the promoters in the battery manufacturing industry, increased profitability margins, improved debt protection metrics, long standing relationships with reputed clientele and positive outlook for domestic defence manufacturing sector.
The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. Brickwork Ratings believes that High Energy Batteries (India) Limited’s business and financial risk profile will be maintained over the medium term.
The outlook may be revised to positive if there is improvement in net sales and profitability on a sustained basis, leading to strengthening of financial risk profile.
High Energy Batteries (India) was trading at Rs780 per piece down by Rs12.8 or 1.61% from its previous closing of Rs792.80 per piece on the BSE, at around 2:39 PM.