CARE revises outlook on rating of Apar Industries Limited

Care Ratings have revised its outlook on the long-term debt instruments of Apar Industries Limited to 'Positive' from 'Stable', while reaffirming the ratings at CARE A/CARE A1. The outlook revision factors expected improvement in business risk profile over the medium term. The Total Operating Income (TOI) increased by 46.1% YoY led by 54% increase in domestic revenue and the export revenue increased by 35% accounting for 38% of TOI. The ratings continue to factor company's well-established and dominant position in the Conductors, Transformer, and Specialty Oil (TSO) segment, diversified revenue sources, the promoters' extensive industry knowledge, the capacity to increase its product offering and an improved overall performance led by increase in volume and value.

The aforementioned strengths are constrained by limited value addition, as portion of orders are acquired through tender bidding processes, limiting the potential for profit margin expansion, and the business's dependence on working capital borrowing (in the form of acceptances), which increases leverage indicators. The overall gearing increased marginally to 1.80x in FY22 (PY:1.69x) on a consolidated basis owing to nature of business being high dependency on working capital (non-fund-based limits). The ratings also take cognizance of the inherent business risk on account of its exposure to the raw material price risk, foreign currency volatility, increasing competition in the industry and freight charge volatility.

Shares of Apar Industries Limited was last trading in BSE at Rs. 1566.25 as compared to the previous close of Rs. 1564.10. The total number of shares traded during the day was 9063 in over 1164 trades.

The stock hit an intraday high of Rs. 1594.45 and intraday low of 1544.95. The net turnover during the day was Rs. 14273272.00.

Source : Equity Bulls

Keywords

AparIndustries INE372A01015 CARE RatingOutlook Reaffirmed