Brickwork assigns A1+ rating to Titan Company's proposed commercial paper

BrickworkRatings (BWR) assigned 'A1+' rating for Titan Company's proposed commercial paper issue of Rs 900 crore.

Further, the rating on the company's bank loan facilities of Rs 5000 crore was reaffirmed. The rating on the proposed long term cash credit of Rs 1000 crore was reaffirmed at 'BWR AAA/stable'. The rating on the short term gold metal loan of Rs 2735 crore and the rating on the proposed short term gold metal loan of Rs 1265 crore was reaffirmed at 'BWR A1+'. The announcement was made after trading hours yesterday, 24 April 2020.

BWR said the ratings continue to draw strength from the strong parentage and support of the Tata group and TIDCO, strategic importance of Titan Company to the Tata group, established brand equity, experienced and professional management. robust fmancial risk profile supported by the company's consistent performance, comfortable liquidity. sound capital structure and absence of long-term debt, strong financial flexibility and prudent financial and risk management practices.

Going forward, the ability of the company to maintain its credit profile, strengthen its business risk profile, improve and consolidate its market share in its new businesses to ensure revenue diversity and manage its working capital efficiently would be key rating sensitivities, the ratings agency said. BWR also noted the recent impact on the business on account of COVID-19. An extension of the present business scenario on a prolonged basis may have an adverse impact on the business. The impact of COVID-19-related restrictions applicable post the lockdown will remain a key monitorable, it added.

On a consolidated basis, Titan Company's net profit rose 14.87% to Rs 474.62 crore in Q3 December 2019 as against Rs 413.19 crore as reported in Q3 December 2018. Net sales stood at Rs 6,454.58 crore in Q3 December 2019, rising 10.53% Y-o-Y from Rs 5,839.82 crore reported as on Q3 December 2018.

Titan Company is engaged in offering watches, jewelry and others. The company's segments include watches, jewellery, eyewear and others.

Shares of Titan Company slipped 0.78% to close at Rs 905.30 on Friday (24 April).

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