CARE revises DFM Foods's outlook to 'negative', reaffirms rating

17 Feb 2022 , 12:16 PM

DFM Foods Ltd has informed that CARE Rating agency has reaffirmed the bank ratings of the company where long-term ratings has been reaffirmed at CARE A / Negative (outlook revised from stable) while short term rating has been reaffirmed at CARE A1. 

According to the rationale report, the revision in outlook of DFM Foods Ltd (DFMFL) takes into account the moderation in operating profitability of the company in 9MFY22 (refers to period from April 01 to Dec 31) due to increase in brand building, selling and marketing expenses and the same are expected to continue in the medium term which will lead to subdued profitability at operating level.

The rating also factors in the company’s comfortable financial risk profile marked by healthy cash and bank balance and liquid investments and low operating cycle.

The ratings, however, are constrained by DFMFL’s geographical concentration in North India, susceptibility to raw material price fluctuations and competition in the packaged food market.

On Thursday at around 12:19 PM, DFM Foods was trading at Rs283.60 apiece down by Rs4.95 or 1.72% on the BSE.