Long term ratings has been reaffirmed at [ICRA]AA- and outlook revised to Positive from stable.
Short term credit ratings has been reaffirmed to [ICRA]A1+ and Commercial papers aslobeen reaffirmed at [ICRA]A1+.
The revision in outlook reflects Mahindra CIE Automotive Limited’s (MCIE) improvement in financial performance across segments post recovery from the impact of the Covid-19 pandemic on its operations.
The ratings reaffirmation continues to reflect MCIE’s large scale of operations, comfortable leverage and coverage indicators with gearing at 0.4 times and interest coverage ratio at 9.2 times as on December 31, 2020.
The ratings, however, remain constrained by MCIE’s subdued return indicators (RoCE) compared to other peers in similar rating category primarily due to sub-par performance of the German forging business. The ratings note the inherent cyclicality in the global automotive industry and the impending electrification of automotive industry, which may impact the company’s revenue and profitability over the medium to long term.
At around 3:27 PM, Mahindra CIE Automotive was trading at Rs170.50 per piece down by Rs1.65 or 0.96% on Sensex.