Fitch Ratings has assigned a national issuer rating of “A(ind)” to the Rs 7,129 million long-term fund-based bank limits and Rs 350 million cash credit limits of Binani Cement (Q, N,C,F)* (BCL). Fitch has also accorded a “F1(ind)” rating to BCL’s Rs 1,607 million short-term non fund-based bank limits.
The ratings reflect BCL’s strong growth in revenue and profitability on account of the upswing in the cement cycle in FY07, together with improvement in the leverage metrics of the company in FY07.
Fitch also notes the aggressive expansion plans of BCL in the coming three to four years, namely the expansion of its China facility, together with the set up of a Greenfield facility in Gujarat. The increase in debt for the same is consistent with the rating assigned; however any additional unforeseen capex plans which impact leverage could act as a negative trigger to the ratings. On the other hand, substantial improvements in BCL`s financial leverage through the issue of future equity issuance could act as a positive rating trigger.
Shares of BCL gained Rs 0.85, or 1.18%, to trade at Rs 73.15. The total volume of shares traded was 1,780 at the BSE. (10.26 a.m., Thursday)