Ratings agency Fitch has revised the outlook on Shyam Telecom to 'stable' from 'negative' on the back of the company's improved financial performance during the last fiscal.
It has also affirmed a 'BBB-(ind)' long-term rating on the telecom firm. A 'BBB' rating denote moderate default risk relative to other issuers or obligations in the same country.
"Fitch Ratings has revised India-based Shyam Telecom Ltd's (STL) outlook to Stable from Negative and affirmed its national long-term rating at 'BBB-(ind)'," Fitch said in a statement.
It further said: "The outlook revision reflects STL's improved financial performance in the financial year ended March 31, 2011, based on its unaudited results".
In 2010-11, STL reported revenue of Rs 680 crore, which was a jump of over two-folds from the previous fiscal. The company's EBIDTA during the last fiscal stood at Rs 12 crore as against a loss of Rs 40 lakh in 2009-10.
"The significant revenue growth was mainly due to a strong demand of code division multiple access (CDMA) handsets from the progressive roll-out of telecom services by STL's associate company, Sistema Shyam Teleservices Limited (SSTL)," Fitch said.
SSTL is currently present in 18 telecom circles in the country.
"STL's ratings continue to reflect the absence of any major capex plan for the next few years and its two-decade presence in the domestic telecom space," Fitch added.
The agency also affirmed moderate ratings on STL's two working capital worth a total of over Rs 160 crore.
