Kabra Extrusiontechnik Limited's credit ratings reaffirmed by CRISIL

CRISIL has reaffirmed its 'CRISIL A/Stable/ CRISIL A1' ratings on the bank facilities of Kabra Extrusiontechnik Limited (KEL).

During fiscal 2020, operating income declined by 10.2% fiscal-on-fiscal, due to subdued economic activity and lower execution of capex plans by major plastic pipe manufacturers during the fourth quarter of fiscal 2020, owing to disruptions caused by the Covid-19 pandemic. However, operating performance witnessed improvement during the first quarter of fiscal 2021 vis-a-vis corresponding period of the previous fiscal, despite the prolonged nationwide lockdown during the period. Company reported EBITDA (earnings before interest, tax, depreciation and amortization) of Rs 3 crore against operating loss reported during corresponding period of previous fiscal, led by cost-cutting measures resulting in lower fixed overheads costs.

Moreover, KEL has completed its major capex programme pertaining to manufacturing plant for lithium-ion battery packs for electric vehicles (EVs); with production being commenced during March 2020. Timely stabilization of operations in the segment, with growing scale and profitability will remain a key monitorable.

Despite the pandemic-led economic disruptions, KEL's business risk profile should sustain driven by established positon in the plastic extrusion machinery industry and healthy order book of more than Rs 125 crore as on August 31, 2020. Moreover, liquidity remains adequately supported by unencumbered cash equivalents / liquid investments of Rs 35 crore as on August 31, 2020.

The ratings continue to reflect KEL's established market position and strong financial risk profile. These strengths are partially offset by modest scale of operations, exposure to intense competition, and susceptibility to cyclicality in the plastic products industry.

Shares of KABRA EXTRUSIONTECHNIK LTD. was last trading in BSE at Rs.71.5 as compared to the previous close of Rs. 72.4. The total number of shares traded during the day was 12489 in over 245 trades.

The stock hit an intraday high of Rs. 72 and intraday low of 69.15. The net turnover during the day was Rs. 876019.

Source : Equity Bulls

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