Transrail Lighting shares zoom 7% after CRISIL upgrades long term rating

Shares of Transrail Lighting were in demand on Thursday, after the company received a credit rating upgrade from CRISIL. Transrail Lighting share price surged 7.5 per cent at Rs 713.55 per share on the BSE in Thursday’s intraday deals. 

 

The domestic credit rating agency, CRISIL Ratings has upgraded Transrail Lighting’s rating on the long-term bank facilities to ‘CRISIL A+/Stable’ from ‘CRISIL A/Positive’ and has reaffirmed its ‘CRISIL A1’ rating on the short-term bank facility.

 

The rating agency said that the upgrade in the long-term rating factors in the improving business risk profile due to increasing scale of operations supported by strong order book, and healthy operating profitability. 

 

 

“Transrail’s revenue is expected to register growth of more than 20 per cent on-year in fiscal 2025 driven by healthy execution of the order book which stood at Rs 10,213 crore as on June 30, 2024. Besides, the company has also emerged as lowest bidder (L1) for few orders, which along with the existing order book, will ensure healthy revenue visibility over the medium term,” the rating agency said in a note.

 

Meanwhile, the company’s Earnings before interest, tax, depreciation and amortization (EBITDA) is also expected to remain healthy over the medium term. The business risk profile will also continue to benefit from the strong technological capabilities of Transrail, its increasing market presence and established clientele, and the favourable prospects for the international as well as domestic transmission and distribution (T&D) and domestic non-T&D business, CRISIL said. 

 

Moreover, the recently concluded (December 2024) initial public offer (IPO) with proceeds of Rs 400 crore and a pre-IPO of Rs 50 crore in September 2024 would bolster Transrail’s financial risk profile and improve key debt metrics, the rating agency said in its rationale note. 

 

Transrail Lighting has a total market capitalisation of Rs 9,210.63 crore. At 11:25 AM, the stock price of the company was trading 3.3 per cent higher at Rs 686.05  a piece on the BSE. By comparison, the BSE’s Sensex was down 0.51 per cent to 77,747.67  level.

 

Transrail is one of the largest EPC companies providing turnkey solutions globally in areas of Transmission, Distribution, Substations and Rural Electrification, Railways, providing solutions for outdoor lighting, for more than 38 years.