CARE has revised the ratings assigned to Educomp Solutions’ (ESL) long term bank facilities of Rs 339.76 crore from ‘CARE A’ to ‘CARE A+’. The credit rating agency has also revised the rating of the company’s long-term/ short-term bank facilities of Rs 327 crore from ‘CARE A/ CARE A1’ to ‘CARE A+/ CARE A1’.
The credit rating agency has reaffirmed the rating of “CARE A1+” for company’s Commercial Paper (CP) programme worth Rs 80 crore and Rs 70 crore. The ratings revision takes into consideration ESL’s operational and income growth driven mainly by increasing the number of schools under the SmartClass product in FY11 and stabilization of the operations of subsidiaries and group companies leading to steady operational cash flows.
The ratings continue to factor in ESL’s strong and experienced management, its dominant position in the education technology segment in India, continuous growth in the past and comfortable profitability margins. The ratings are, however, constrained by the moderately high gearing levels, execution risk associated with the high expansion plans and its increasing competition with other new player in the SmartClass and Instructional and Computational Technology (ICT) segment.
ESL is engaged in providing digital educational content in the classroom through its patented product ‘SmartClass’ and ICT. The company is also engaged in providing vocational, higher education and professional development, K-12 schools and online, supplementary and global education business.
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