Brickwork Ratings has upgraded the ratings for the enhanced Bank Loan Facilities of Rs. 92 Crs. of A Infrastructure Ltd. The rating of Long Term Fund Based facilities has been upgraded from BWR BBB- / Stable to BWR BBB / Stable.
The rating of Short Term Non-Fund Based facilities has been upgraded from BWR A3 to BWR A3+.
The upgrade in the ratings of A Infrastructure Ltd (AIL or the company ) factors in a y-o-y steady growth in revenues, with improved profit and profit margins, coupled with improvement in its overall financial risk profile as indicated by debt protection metrics and overall gearing, besides its adequate liquidity position. Going further, revenues are expected to improve in FY22 supported by higher demand from the rural areas, a key market for AIL, given normal monsoons leading to better crop output and thereby higher disposable rural income. Profitability is also expected to remain healthy for FY22 despite increase in raw material prices. Improvement in overall scale of operations is likely to lead to better fixed cost absorption. AIL's increasing penetration in rural markets and government thrust on rural housing; is likely to further sustain improvement in its business risk profile, and consequently a stronger financial risk profile.
The lockdown and other measures taken by various central and state governments towards containment of COVID-19, did not have any major impact on the AIL's operations as demand was mainly driven by the rural markets. The ratings continue to reflect established market position in the asbestos-cement (AC) sheets industry, wide distributor network and strong financial risk profile.
These strengths are partially offset by its exposure to intense competition from peers and substitute products and exposure to regulatory threats of ban on manufacture or use of asbestos in end-user markets and in key asbestos-producing nations. BWR also notes that there are delays in the commencement of its distillery unit, which was earlier scheduled to commence operations in FY20 and is now extended to Dec 2022.
BWR believes that AIL's business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case of substantial improvement in operating parameters. BWR may revise its outlook from 'Stable' to 'Negative' in case there is a deterioration in the financial parameters over the medium term.
Shares of A Infrastructure Limited was last trading in BSE at Rs. 31.75 as compared to the previous close of Rs. 33.5. The total number of shares traded during the day was 3422 in over 48 trades.
The stock hit an intraday high of Rs. 36.85 and intraday low of 31.75. The net turnover during the day was Rs. 111365.