Long term bank facilities has been upgraded to [ICRA]AA- with outlook revised to stable from positive.
Short term bank facilities has been reaffirmed to [ICRA]A1+ while NCD ratings ugraded to [ICRA]AA- (Stable).
The rating upgrade factors in the Dodla Dairy Limited’s (DDL) improved and comfortable financial profile as infusion of equity through IPO and pre-IPO money raised significantly increased cash balance which would be utilised to repay its term loans entirely.
The ratings consider established brand presence of Dodla in South India, and its diversified presence across the districts of Andhra Pradesh (AP), Karnataka and parts of Tamil Nadu (TN) and Telangana.
The ratings are, however, constrained by the commoditised nature of products and intense competition from organised cooperatives, private-sector and unorganised players.
The Stable outlook on the rating factors in ICRA’s belief that the company will continue to benefit from its diversified and established presence in South India and its strong connection with farmers along with a robust distribution network. The outlook also factors in ICRA’s belief that the company will continue to maintain a comfortable financial profile with strong coverage metrics.
At around 12:40 PM, Dodla Dairy was trading at Rs618 per piece higher by 0.18% on Sensex.