 "Deccan Cements surges on credit rating upgrade")
Deccan Cements has rallied 6% to Rs 881, also its 52-week high on the BSE, in an otherwise weak market after the credit rating agency ICRA upgraded the ratings of the company’s bank loan facilities.
ICRA has upgraded the rating of the company to A from BBB+ citing improvement in operational and financial performance of the company in fiscal year 2016.
“The upward revision in the ratings factor in the improvement in the operational and financial performance of the company during FY2016 on account of higher cement sales volumes and higher cement realizations supported by pricing discipline and revival in demand. This enabled the company to improve the capacity utilization, pass on the increase in the input costs, thus translating into improved OPBIDTA/MT, earnings, capital structure and coverage indicators,” ICRA said in a release.
Going forward, the demand which was earlier adversely affected due to unrest in erstwhile AP is now expected to improve given the new infrastructure/project announcements in both Andhra Pradesh and Telangana. However, operating profitability critically hinges on the ability of the company to pass on relatively high freight costs and power & fuel costs, it added.
Earlier in May, the CRISIL had upgraded the credit ratings of the company engaged in cement and cement product business.
In past three-months, the stock has outperformed the market by surging 63% as compared to 7.4% rise in the S&P BSE Sensex.
The trading volumes on the counter more than doubled with a combined 118,964 shares changed hands on the BSE and NSE till 02:39 PM.
ICRA has upgraded the rating of the company to A from BBB+ citing improvement in operational and financial performance of the company in fiscal year 2016.
“The upward revision in the ratings factor in the improvement in the operational and financial performance of the company during FY2016 on account of higher cement sales volumes and higher cement realizations supported by pricing discipline and revival in demand. This enabled the company to improve the capacity utilization, pass on the increase in the input costs, thus translating into improved OPBIDTA/MT, earnings, capital structure and coverage indicators,” ICRA said in a release.
Going forward, the demand which was earlier adversely affected due to unrest in erstwhile AP is now expected to improve given the new infrastructure/project announcements in both Andhra Pradesh and Telangana. However, operating profitability critically hinges on the ability of the company to pass on relatively high freight costs and power & fuel costs, it added.
Earlier in May, the CRISIL had upgraded the credit ratings of the company engaged in cement and cement product business.
In past three-months, the stock has outperformed the market by surging 63% as compared to 7.4% rise in the S&P BSE Sensex.
The trading volumes on the counter more than doubled with a combined 118,964 shares changed hands on the BSE and NSE till 02:39 PM.