ICRA revises SML Isuzu's long term rating to 'A+' from 'AA-'

SML Isuzu informed that the credit ratings agency ICRA had revised its rating on the company's long term (bank facilities) to [ICRA A+] (Negative) from [ICRA AA-] (Negative).

The ratings agency has reaffirmed its rating on the company's short term (banking facilities & commercial paper) at [ICRA A1+]. The announcement was made after market hours yesterday.

ICRA said that the domestic commercial vehicles (CV) industry witnessed several headwinds during FY 2019-2020 with subdued macroeconomic environment, surplus capacity in the trucking system, cautious financing environment and regulatory developments related to emission norms. These headwinds were further compounded by Covid-19 pandemic having its adverse impact on the economy, and consequently demand for CVs. Accordingly, the domestic CV industry sales to contract further in the current fiscal.

Share of SML Isuzu rose 3.46% to Rs 431.70 on the BSE. It traded in the range of 422.75 & 436 so far during the day.

The scrip extended gains for third day in row. It has added 7.4% in three sessions from its recent closing low of Rs 402.10 recorded on 14 August 2020.

On the technical front, the stock's RSI (relative strength index) stood at 67.806. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock is currently trading above its 50-day, 100-day and 200-day simple moving averages placed at 415.74, 406.50 and 402.87, respectively.

SML Isuzu is engaged in the business of manufacture of commercial vehicles and spares. The firm produces light and medium commercial vehicles.

On a standalone basis, the company reported a net loss of Rs 2.01 crore in Q4 March 2020 as against a net profit of Rs 22 crore in Q4 March 2019. Net sales declined 36.6% to Rs 272.17 crore in Q4 March 2020 over Q4 March 2019.

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