JBF Industries tumbles after ratings downgrade

JBF Industries fell 5.17% to Rs 211.90 at 14:09 IST on BSE after credit rating agencies slashed their rating on the company.

The announcement was made after market hours on Friday, 28 July 2017.

Meanwhile, the S&P BSE Sensex was up 177.73 points, or 0.55% to 32,487.61.

On the BSE, 1.04 lakh shares were traded in the counter so far, compared with average daily volumes of 26,235 shares in the past one quarter. The stock had hit a high of Rs 221 and a low of Rs 198.50 so far during the day. The stock hit a record high of Rs 326 on 22 June 2017. The stock hit a 52-week low of Rs 185.90 on 22 November 2016.

The stock had underperformed the market over the past one month till 28 July 2017, falling 20.90% compared with 4.71% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 23.33% as against Sensex's 7.99% rise. The scrip had also underperformed the market in past one year, rising 9.24% as against Sensex's 15.18% rise.

The small-cap company has equity capital of Rs 81.87 crore. Face value per share is Rs 10.

JBF Industries announced that the rating of the company has been downgraded to "D" default rating by rating agencies predominantly due to delays by the JBF group in servicing its debt obligations.

JBF Industries is a manufacturer of polyester value chain products. The company is one of the largest polyester chips and yarn manufacturers in India and around 75% of the total domestic sales of the company find applications in the textile segment.

The company added that due to the recent policy changes by the Government of India namely, demonetization exercise and goods and services tax (GST) implementation, there have been protesting shut downs in the domestic unorganized textile segment. This has resulted in the cash flows of the company to be severely affected and delays in servicing some of its debt obligation with the lenders. In turn this has led to a formation of a joint lending forum (JLF) by the lenders as per applicable guidelines of the Reserve Bank of India (RBI). However, the company is of the view that these policy changes by the government, viz. demonetization exercise and GST implementation, will have an overall positive effect on the industry and the company in due course.

Net profit of JBF Industries declined 41.9% to Rs 11.14 crore on 7.7% rise in net sales to Rs 1069.92 crore in Q4 March 2017 over Q4 March 2016.

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