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ICRA reaffirms rating outstanding on Alstom Projects' Rs 47.5 crore fund based limits

16 Mar 2012 Evaluate

ICRA has reaffirmed the rating outstanding on Alstom Projects India’s Rs 47.5 crore fund based limits and Rs 3142.21 crore long term non-fund based limits at “AA”. However, the outlook on the long-term rating has been revised from stable to negative. The credit rating agency has also reaffirmed an A1+ rating to Rs 3142.21 crore short term non-fund based limits of APIL.

The ratings reaffirmation continues to factor in the healthy demand from the key business segments that the company operates in (namely power generation sector and transport sector), its strong financial profile characterized by its low dependence on debt, healthy cash accruals and strong liquidity of the company.

These strengths are however tempered by the recent slowdown in demand from the power generation sector in India and competitive threats from domestic as well as international market participants. In addition, ICRA takes into account the downgrade of the rating of Alstom SA (the ultimate holding company of APIL) by Moody’s from Baa1 (Stable outlook) to Baa2 (negative outlook) while assigning the negative outlook to APIL’s long-term rating.

Alstom Projects is India’s leading environmental control systems provider with 3 GWs worth of orders, accounting for about 50% market share. The company is well positioned to serve India’s growing hydro needs. Projects currently under execution include the 2000 MW Subansiri Lower hydroelectric power plant in the states of Assam and Arunachal Pradesh, India’s largest hydro project.

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