Credit rating agency, CARE has revised rating of Srikalahasthi Pipes’ long term bank facilities worth Rs 500.84 crore to ‘A+’ from ‘A’. The rating agency has revised rating of company’s short term bank facilities worth Rs 320 crore to ‘A1+’ from ‘A1’. Furthermore, the rating agency has also revised rating of company’s Commercial Paper worth Rs 75 crore from ‘A1+’ to ‘A1’.
The revision in rating is on account of the significant improvement in the financial risk profile of the company in FY15 marked by improvement in capital structure and debt protection metrics supported by improvement in the business risk profile due to backward integration initiatives undertaken by the company. 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.
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 FY15 the company earned a PBILDT of Rs.187.04 crore and a PAT of Rs.82.98 crore on a total income of Rs 1,090.79 crore.
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