Brickwork upgrades 'BBB/Stable' rating on Ajanta Soya's bank loan facilities

The rating upgraded factors in the significant improvement in business and financial risk profile of the company.

May 14, 2021 09:05 IST India Infoline News Service

Brickwork Ratings (BWR) has upgraded the long-term rating to BWR BBB (Stable) and short-term rating to BWR A3+ for the bank loan facilities of Ajanta Soya Ltd.

The rating upgraded factors in the significant improvement in business and financial risk profile of the company.

According to the RAtionale, the rating continues to derive comfort from the company's experienced promoters, diversified product portfolio with a wide distribution network spread across multiple states.

However, these strengths are partially offset by the fluctuation in raw material prices, inherent risk of the industry along with intense competition and risk of volatility in profit margins, besides corporate guarantee issued by the company to the lenders of M/s Dhruv Global Ltd, a related party concern of ASL.

The outlook is Stable as the company was able to sustain revenues from business operations in FY20 and 9MFY21; and the essential nature of the edible oil industry which provides revenue visibility in the medium term.

Ajanta Soya was trading at Rs131 per piece up by Rs8.25 or 6.72% on the BSE, at around 10:00 AM.

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