ICRA reaffirms long-term rating of International Combustion (India) Limited

The credit rating agency ICRA Limited (ICRA) has re-affirmed the long-term rating of [ICRA]BB+ (pronounced as ICRA double B plus) [signifying a moderate risk of default regarding timely servicing of financial obligations] on the fund-based and non-fund based working capital credit facilities enjoyed by the Company from its bankers on consortium basis. The outlook on the long term rating has been maintained at Negative. ICRA has also re-affirmed the short-term rating of [ICRA]A4+ (pronounced as ICRA A four plus) [signifying a minimal degree of safety regarding timely servicing of financial obligations and carrying very high credit risk and susceptibility to default] on the aforementioned facilities.

ICRA has re-affirmed the ratings and maintained the outlook thereon primarily considering the Company's proven track record in the Engineering / Material Handling Equipment as well as the Geared Motors / Gear Boxes segments and its technological tie-ups with reputed global players, which enhance the Company's competitive position. ICRA also notes the Company's conservative capital structure. The ratings, however, factor in the Company's weak performance in 9M FY2021, reflected by an operating loss and a higher net loss compared to 9M FY2020 mainly due to a low revenue in Q1 FY2021 amid the Covid-19 pandemic, notwithstanding an improvement in the Company's revenue and profitability in the recent months. The ratings are also constrained by the continuing weak performance of the Building Material Segment, which, in the opinion of ICRA, is likely to exert pressure on the Company's overall profitability and cash flows until the segment's scale of operation surpasses the break-even level.

Shares of INTERNATIONAL COMBUSTION (INDIA) LTD. was last trading in BSE at Rs.174 as compared to the previous close of Rs. 174.6. The total number of shares traded during the day was 5762 in over 11 trades.

The stock hit an intraday high of Rs. 178.2 and intraday low of 174. The net turnover during the day was Rs. 1024688.

Source : Equity Bulls

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