CARE revises ratings on Udaipur Cement Works' long term borrowings

CARE has also reaffirmed Short Term Bank Facilities Rating at the highest possible level of A1+ (CE).

July 05, 2021 10:15 IST | India Infoline News Service
The Rating Agency, CARE Ratings Limited has upgraded Udaipur Cement Works Ltd Credit Rating for its various Long Term Borrowings by One Notch to CARE AA (CE); Stable from CARE AA- (CE); Stable.

CARE has also reaffirmed Short Term Bank Facilities Rating at the highest possible level of A1+ (CE).

The Company's Rating is based on Credit Enhancement on the back of the Corporate Guarantee provided by the Holding Company, JK Lakshmi Cement Ltd (JKLC) for its Borrowings.

Accordinf to the Rationale report, the Enhancement in the Rating assigned to the Long Term Bank facilities of JKLC & the Company takes into account substantial improvement in the Holding Company's Consolidated Financial Risk Profile over the past few years leading to Below Unity Gearing Level and comfortable Total Debt/PBILDT Ratio as at Financial Year 2021 end.

The Rating revision further factors in Strong Operational Performance at Consolidated Level driven by Robust Volume Growth across regional markets, improved cost efficiencies and Higher SalesRealization achieved during FY 2020 and FY 2021.

The revision in Rating also considers the improvement in the operational risk profile of the Company resulting in healthy contribution of Cash Accruals at consolidated level.

At around 10:15 AM, Udaipur Cement Works was trading at Rs32.60 apiece up by Rs2 or 6.54% on Sensex.

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