HeidelbergCement India (HCIL) said that India Ratings and Research has upgraded the company's long-term issuer rating to 'IND AAA' from 'IND AA+' and has maintained 'stable' outlook on the same.
India Ratings (Ind-Ra) said that the upgrade factors in the continued strong linkages of HCIL with its global parent, HeidelbergCement AG (HCAG), as reflected in the parent's consistent articulation of the strategic importance of India operations.
The upgrade also factors in strong performance and financial profile of HCAG and its Indian operations - (HCIL) and Zuari Cement (ZCL), and the potential simplification of business through the merger of both the latter entities.
The credit ratings agency said that future developments that could lead to a negative rating action include any weakening of linkages with HCAG, significant deterioration in the credit profile of HCAG, substantial reliance on non-guaranteed/cross-default debt, making it the primary source of funding, financial and operating performance of India Operations (HCIL/ZCL) being weaker than Ind-Ra's expectations, leading to a reduction in strategic importance to HCAG.
HeidelbergCement India is a subsidiary of HCAG, Germany. The company operates in central India in Damoh (Madhya Pradesh) and Jhansi (Uttar Pradesh) and in southern India in Ammasandra (Karnataka). The capacity of its manufacturing facilities in Madhya Pradesh, Uttar Pradesh and Karnataka is 6.26 million tonnes per annum.
The company's standalone net profit declined 4.55% to Rs 59.56 crore despite a 11.03% rise in sales to Rs 569.24 crore in Q2 FY22 over Q2 FY21.
The scrip advanced 1.43% to end at Rs 247.65 on the BSE on Muharat Trading session (November 4).
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