Brickwork Ratings improves long-term ratings of Jindal Worldwide
Jindal Worldwide said Brickwork Ratings improved long-term ratings and reaffirmed short-term ratings for bank loan facilities of Rs 565.66 crore.
Brickwork Ratings (BWR) has indicated that the rating of Jindal Worldwide (JWL or the company) has been upgraded to “BWR AA-” and that the short-term rating has been reaffirmed to “BWR A1 +” due to the strong presence of the group, improving the financial performance of the company, a moderate financial risk profile and adequate liquidity.
Ratings also took into account the company’s resilience to recover from the impact of COVID-19, commodity price volatility and meager profit margins.
BWR believes that the business risk profile of Jindal Worldwide Ltd will be maintained over the medium term and that the stable outlook is maintained to reflect the likely improvement in performance in FY21, despite the pandemic situation.
Going forward, the company’s ability to improve the scale of operations, improve and maintain profitability, as well as debt service capacity and liquidity, will be key rating sensitivities.
The rating can be improved if the company is able to achieve significant growth in turnover and profitability supported by a favorable industrial scenario and optimal use of capacities.
The rating may be downgraded if lower than expected income negatively affects profit margins, coverage ratios, liquidity and debt ratios, the rating agency said.
Jindal Worldwide is the flagship company of the Ahmedabad-based Jindal Group. Its product profile consists of denim fabric, yarn-dyed and bottom-width shirts, as well as export-oriented home furnishings.
The company’s consolidated net profit increased by 42.10% to Rs 25.01 crore on a 52.41% increase in net sales to Rs 630.51 crore in Q2 FY22 compared to Q2 FY21.
The script rose 2.47% to end at Rs 167.95 on BSE on Thursday.
The national stock exchange is closed today, November 19, 2021 because of Guru Nanak Jayanti.
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