CARE updates on ratings of International Combustion India Ltd

Care Ratings Limited (CARE), has assigned the long-term rating of CARE BBB- (pronounced as CARE triple B minus) [signifying a moderate degree of safety 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 stated as Stable. CARE has also assigned the short-term rating of CARE A3 (pronounced as CARE A three) [signifying a moderate degree of safety regarding timely servicing of financial obligations and carrying higher credit risk as compared to instruments rated in the two higher categories] on the aforementioned facilities.

CARE has assigned the above ratings primarily taking into account the experienced promoters of the Company with established tratk record in material handling & industrial gear segments, reputed and diversified clientele, moderate order book position providing revenue visibility in the near term & technological tie-ups with reputed global players which enhance the competitive position of the Company. The rating also factors in moderate financial performance of the Company with significant improvement witnessed in FY 2021-22 on the back of increased demand in material handling equipment & industrial gear segments. The rating also draws comfort from satisfactory capital structure marked by low reliance on external debt.

The rating however is partially offset by weak performance of the building material segment which has continued to exert pressure on overall profitability & cash flows of the Company. CARE, however, has opiend that with the introduction of newer products in the building material segment & collaboration with a reputed global player, the segment's sales have improved & losses have reduced & is expected to break even in the current financial year. The rating is also constrained by cyclicality associated with the engineering & capital goods industry, competitive nature of industry & susceptibility of profitability to volatility in prices of raw materials due to fixed price contracts with customers.

This rating assignment by CARE is to be considered as a ratings upgrade vis-a-vis the last ratings which was assigned by the erstwhile ratings agency of the Company, viz. ICRA Ltd., being the long-term rating of [ICRA]BB+ and short-term rating of [ICRA]A4+.

Shares of INTERNATIONAL COMBUSTION (INDIA) LTD. was last trading in BSE at Rs. 267.95 as compared to the previous close of Rs. 263.00. The total number of shares traded during the day was 522 in over 11 trades.

The stock hit an intraday high of Rs. 270.00 and intraday low of 253.55. The net turnover during the day was Rs. 138859.00.

Source : Equity Bulls

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INTERNATIONALCOMBUSTIONINDIA INE403C01014 RatingUpdate NewRatingAgency