Credit rating agency, CARE has reaffirmed ‘BB+’ rating to Garg Furnace’s long term bank facilities worth Rs 48.23 crore which was enhanced from Rs 32.23 crore and ‘A4+’ rating to company’s Short term Bank Facilities worth Rs 21.50 crore which was enhanced from Rs 11.50 crore. The company has received the said ratings on the back of its low profitability margins due to limited value addition, leveraged capital structure and weak debt coverage indicators.
Garg Furnace is engaged in the manufacturing of steel products, ie, ingots, rounds, wire rods, castings, etc, with a total capacity of 85,000 metric tonnes per annum (MTPA) at its manufacturing facility situated at Ludhiana, Punjab. During FY13, the company registered a PBILDT and PAT of Rs 9.26 crore and Rs 0.93 crore, respectively, on a total operating income of Rs 194.43 crore.