India Ratings upgrades Capacite Infra to 'IND BBB'; outlook 'stable'

Capacite Infraprojects on Monday said that India Ratings and Research (Ind-Ra) has upgraded the company's long-term issuer rating to 'IND BBB' from 'IND D'.

The outlook is 'stable', the credit ratings agency said.

Ind-Ra said that the upgrade reflects CIL's timely debt servicing on the term loans since 23 August 2021, as per the information shared by the company along with the confirmation from the lenders in their respective communication with the agency.

The rating upgrade also factors in the improvements in the internal controls and governance measures established by Capacite Infra by way of configuring the auto-debit facility for the term loans to a single cash credit account.

The company has also given an undertaking to the agency to maintain sufficient balance in the respective cash credit account to honour the next scheduled repayment all the time.

Also, there is a second layer of protection in the form of a Rs 7.35 crore debt service reserve (DSR).

The ratings also reflect Capacite's pick-up in order execution, ability to maintain comfortable margins and improved liquidity profile, the company said.

Capacite Infraprojects provides engineering, procurement and construction/turnkey solutions for housing, high rises, super high rises, speciality buildings and urban infrastructure. The company has recently forayed into development of projects for the public sector.

The company reported a consolidated net profit of Rs 17.08 crore in Q2FY22 as against a net profit of Rs 4.74 crore in Q2FY21. Net sales during the quarter increased by 89.4% YoY to Rs 33.39 crore.

The scrip shed 1% on Monday at Rs 170.20 on the BSE.