Trident gains on credit rating upgrade

The stock rallied 6% to Rs 61.20 on BSE in intra-day trade, extending its Friday's 6% gain on back of heavy volumes.

Trident has rallied 6% to Rs 61.20 on BSE in intra-day trade, extending its Friday’s 6% gain, after rating agencies Credit Analysis & Research Ltd (CARE) and CRISIL upgraded the long-term and short term bank facilities of the company.

“The revision in ratings assigned to the bank facilities of Trident factors in the strong business performance reflected increasing profitability, healthy cash flows leading to adequate liquidity and improvement in its debts coverage parameters,” CARE said in a release. LINK

The upgrade reflects CRISIL's belief that Trident's business risk profile in the home textile business will improve over the medium term driven by ramp­up in utilisation of the towels and newly established bed­linen facility, as the risks associated with project implementation have now subsided.

CRISIL believes that the home textile business growth combined with steady contributions from the paper and yarn segments will lead to a healthy revenue growth of over 20% in fiscal 2017 and at 10­15% per annum over the medium term. The  benefits  of  increasing  scale  of  operations,  highly integrated manufacturing  process  in  both  home textiles and  paper,  and  continued  access  to  low-cost  raw  material  for  paper  division  will ensure  healthy  and  sustained operating profitability at 19­20% in the medium term. LINK

At 10:47 am, the stock was up 3.6% at Rs 59.65 on the BSE, as compared to 0.11% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 4.41 million shares changed hands on the counter on the BSE and NSE.