Faze Three Autofab Limited's Long-term rating upgraded to 'CRISIL BB+ / Stable'

CRISIL Ratings has upgraded its rating on the long-term bank facilities of Faze Three Autofab Ltd (FTAL; formerly known as Aunde Faze Three Autofab Ltd) to 'CRISIL BB+/Stable' from 'CRISIL BB/Stable'. The short-term rating has been reaffirmed at 'CRISIL A4+'.

The rating upgrade reflects CRISIL Ratings' expectation that the FTAL will register a healthy revenue growth and steady profitability over the medium, on back of healthy market share and steady demand for the products supported by expected recovery in key end user automobile industry. FTAL was able to sustain its overall business risk profile in fiscal 2021 marked by significant improvement in operating margin to around 16.85% from 10.75% in fiscal 2020; despite drop in revenues of around 19% due to COVID induced lockdown in Q1FY21. The improvement in margin has been driven primarily by subdued prices of key raw materials and efficiency enhancement as compared to last fiscal. Prices of key raw materials are influenced by crude oil price which had largely remained at subdued levels for fiscal 2021. Although, now with increase in crude oil prices and adverse USD/INR rate movement; profitability is expected to moderate, it should be sustained at around 11%. Further, healthy accretions to reserves in FY21 has resulted in improvement in the capital structure, with TOLANW (total outside liabilities to adjusted net worth) at ~1.6 times as on March 31, 2021 from 2.2 times as on March 31, 2020.

The rating continues to reflect FTAL's long presence since 1997 in the automotive fabrics business, established relationships with original equipment manufacturers (OEMs), and comfortable financial risk profile. These strengths are partially offset by exposure to risks of cyclicality in end user automobile industry, susceptibility to volatility in raw material prices and working capital-intensive operations.

Shares of Faze Three Autofab Ltd was last trading in BSE at Rs.91.5 as compared to the previous close of Rs. 92.05. The total number of shares traded during the day was 3274 in over 72 trades.

The stock hit an intraday high of Rs. 92.95 and intraday low of 88.25. The net turnover during the day was Rs. 297465.

Source : Equity Bulls

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