CARE reaffirms rating of Akar Auto Industries Ltd

CARE Ratings Limited, vide its letter dated 8th April, 2021, has reaffirmed a rating of 'CARE BB' and 'CARE A for the credit facilities availed from Canara Bank.

The reaffirmation of ratings to the bank facilities of Akar Auto Industries Limited (AAIL) are constrained by modest scale of operations, below average profitability margins, volatile input prices, working capital intensive nature of business reflected in the highly utilized bank limits and moderately higher leverage, pricing pressure from the OEM's, susceptibility to the cyclicality of domestic automobile segment.

The ratings also take into account the deterioration in financial risk profile of the company during 9MFY21 (un-audited; refers to the period from April 1 to December 31) on account of COVID-19 outbreak and subsequent disruptions. However, the ratings derive strength from promoter's experience in the field of auto ancillary and steel industry, long term relationship with reputed and diversified clientele, modest order book position providing revenue visibility for medium term.

Shares of Akar Auto Industries Ltd was last trading in BSE at Rs.17.9 as compared to the previous close of Rs. 18.75. The total number of shares traded during the day was 3471 in over 23 trades.

The stock hit an intraday high of Rs. 19 and intraday low of 17.8. The net turnover during the day was Rs. 63119.

Source : Equity Bulls

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