Credit rating agency, CARE has assigned ‘BB’ rating to the long-term bank facilities of Birla Power Solutions (BPSL) for Rs 40.00 crore. The agency has also assigned ‘A4’ rating to the short-term bank facilities of the company amounting Rs 10.00 crore.
The ratings are constrained by the weak financial profile marked by stagnant growth in the business of BPSL operating in a highly competitive industry coupled with low profitability margins due to high proportion of the trading income and volatility in the raw material prices. Going forward, the ability of the company to scale up its operations, improve its profitability along with the working-capital prudence and maintenance of the gearing ratios will be the key rating sensitivities.
Birla Power Solutions is part of the diversified Yash Birla group. BPSL is engaged in the manufacturing of Gensets, pumpsets, multipurpose engines and its application products such as Sprayers, Vibrators and Lawn Mowers etc.