Orient Bell Limited rating outlook revised to 'Stable', ratings reaffirmed

CRISIL Ratings has revised its outlook on the bank facilities of Orient Bell Ltd (OBL) to 'Stable' from 'Negative' and reaffirmed the rating at 'CRISIL A-'. The short term rating has been reaffirmed at 'CRISIL A2+'.

The revision in outlook reflects expectation of continued improvement in financial and business risk profile of the company. OBL was able to register muted revenue growth in fiscal 2021 despite covid-19 adversely impacting Q1FY21. Operating revenue stood at Rs 512 crore in Fiscal 2021, 2% better than Rs. 502 crore in Fiscal 2020, however, lower than the Rs. 582 crore achieved in Fiscal 2019.

Operating profitability continued to remain moderate in the range of 5.4-7.3% over past 4 fiscals through Fiscal 2021. The same improved to 6.9% in Fiscal 2021 from 5.4% in Fiscal 2020 largely driven by demand recovery post covid-19 pandemic as well as better realizations driven by diversification in product mix including larger size tiles which were sold at premium.

The ratings also take cognizance of the performance during first quarter of Fiscal 2022, wherein OBL incurred operated losses, however, following quarters of current Fiscal 2022 are expected to be better similar to the rebound during Fiscal 2021. Sustained improvement in business risk profile leading to a better financial risk profile would remain a rating monitorable.

CRISIL Ratings on the bank facilities of OBL continues to reflect the company's established market position in the tiles industry, its diversified geographical reach and clientele, and comfortable financial risk profile. These strengths are partially offset by vulnerability to cyclicality in the end-user real estate industry and to fluctuations in gas and raw material prices, and exposure to intense competition.

Shares of Orient Bell Limited was last trading in BSE at Rs. 339.75 as compared to the previous close of Rs. 346.65. The total number of shares traded during the day was 1110 in over 141 trades.

The stock hit an intraday high of Rs. 346.3 and intraday low of 332.65. The net turnover during the day was Rs. 375858.

Source : Equity Bulls

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