According to the Rationale report, the rating upgrade reflects the expectations of sustenance business profile and improved financial profile.
MCL’s financial has also improved benefitting from the raising of equity capital towards the end of fiscal 2020. With the controlled working capital cycle and absence of any large debt funded capex plans, financial profile should sustain over medium term.
The rating reflects the extensive experience of its promoters in the electrical goods industry, significant ramp-up in operations, and moderate financial profile. These strengths are partially offset by a modest operating margin and vulnerability to fluctuations in raw material prices.
CRISIL Ratings believes MCL will continue to benefit from the extensive experience of its promoters and established relationships with customers.