CARE revises Udaipur Cement Works long-term debt ratings
The rating agency CARE Ratings Limited has upgraded Udaipur Cement Works Ltd’s credit rating by one notch for its various long-term borrowings from CARE AA (CE); Stable of CARE AA- (CE); Stable.
CARE also reaffirmed the rating of short-term bank facilities at the highest possible level of A1 + (CE).
The company’s rating is based on the credit enhancement on the back of the corporate guarantee provided by the holding company, JK Lakshmi Cement Ltd (JKLC) for its borrowings.
According to the Rationale report, the improvement in the rating assigned to the long-term banking facilities of JKLC and the company takes into account the substantial improvement in the consolidated financial risk profile of the holding company in recent years, leading to a debt level below unity and at a comfortable total Debt / PBILDT Ratio at the close of Fiscal Year 2021.
The rating review also takes into account a strong operational performance at the consolidated level thanks to robust volume growth in regional markets, improved profitability and higher sales achievement in fiscal years 2020 and 2021.
The rating review also takes into account the improvement in the Company’s operational risk profile resulting in a healthy contribution from Cash Accruals at the consolidated level.
At around 10:15 a.m., Udaipur Cement Works was trading at Rs 32.60 each, up Rs 2 or 6.54% on Sensex.