Long-term ratings has been upgraded to BWR BBB/Stable while Short-term rating has been upgraded to BWR A3+.
The upgrade in the ratings of A Infrastructure factors in a yoy steady growth in revenues, with improved profit and profit margins, coupled with improvement in its overall financial risk profile as indicated by debt protection metrics and overall gearing, besides its adequate liquidity position.
The ratings continue to reflect established market position in the asbestos-cement (AC) sheets industry, wide distributor network and strong financial risk profile.
These strengths are partially offset by its exposure to intense competition from peers and substitute products and exposure to regulatory threats of ban on manufacture or use of asbestos in end-user markets and in key asbestos-producing nations.
BWR also notes that there are delays in the commencement of its distillery unit, which was earlier scheduled to commence operations in FY20 and is now extended to Dec 2022.
BWR believes that AIL’s business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term.
The rating outlook may be revised to 'Positive' in case of substantial improvement in operating parameters. BWR may revise its outlook from 'Stable' to 'Negative' in case there is a deterioration in the financial parameters over the medium term.
At around 12:01 PM, A Infrastructure was trading higher by 0.92% at Rs33 per piece on Sensex.