Credit Analysis and Research (CARE) has revised the rating of ‘CARE D’ to ‘CARE B’ for Keerthi Industries’ long-term bank facilities aggregating to Rs 65.61 crore, reduced from earlier of Rs 73.90 crore.
The revision in the rating takes into account the commencement and stabilization of the expansion project, improved liquidity position and consequently regularized debt servicing obligations. The rating also factors in the long track record of the company, experienced management and firm raw material sourcing arrangement.
The rating is however constrained by relatively small size of the company, low capacity utilization, merger of the financially weak company, lower profitability and interest coverage, deteriorating gearing levels and moderate industry outlook with overcapacity in the region and competition from the relatively larger players.
The company is engaged in manufacturing of Ordinary Portland Cement (OPC) and Pozzolona Portland cement (PPC) with the product mix of OPC: PPC in the ratio of about 95:5. It sells its cement under the brand name ‘Suvarna Cements’. Besides, KIL has a wind energy division (1.5 MW) at Karnataka and electronics division (engaged in manufacturing of Printed Circuit Boards) in Hyderabad.