Credit rating agency, CARE has reaffirmed ‘A’ rating to Srikalahasthi Pipes’ long term bank facilities worth Rs 546.72 crore and ‘A1’ rating to company’s Short term Bank Facilities worth Rs 320 crore. The rating agency has also reaffirmed ‘A1’ rating to the company’s Commercial Paper worth Rs 75 crore.
The ratings continues to derive strength from the experienced promoter, established position of the group in the Ductile Iron (DI) pipe industry, reasonable revenue visibility in view of the satisfactory order book position with reputed clients, satisfactory capacity utilization level and improvement in the financial performance in FY14 (refers to the period April 1 to March 31). The ratings also factor in the volatility in input & finished goods prices, foreign exchange fluctuation risks, gearing ratio being on the higher side, elongated working capital cycle and risk associated with the implementation of the ongoing projects.
Srikalahasthi Pipes is engaged in the manufacturing of Ductile Iron pipes, pig iron and portland slag cement with DI pipes being the main product. The current promoter of the company, Electrosteel Castings (ECL), took over the controlling stake in SPL from the Lanco group of Hyderabad in 2002. During FY14 the company earned a PBILDT of Rs 117 crore and a PAT of Rs 38.7 crore on a total income of Rs 996.6 crore.
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