You are here: Home » Companies » News
Business Standard

Ind-Ra upgrades Eveready's long-term credit ratings, outlook positive

Rating agency says upgrade reflects improvement in firm's financial profile and liquidity in 1HFY21, which was continuing in 2HFY21 backed by better profitability

Topics
Ind-Ra | Eveready Industries | credit rating

Ishita Ayan Dutt  |  Kolkata 

eveready
Ind-Ra expects EIIL’s EBITDA margins over FY21-22 to stabilize at 14-16 per cent, helped by the improved performance of the lighting and appliance segments over 2HFY21-FY22.

India informed the stock exchanges on Tuesday that India Ratings and Research has upgraded its long term credit ratings, reflecting an improvement in the company’s financial profile and liquidity position.

In a filing with the exchanges, Eveready said that the company’s long-term credit ratings had been upgraded to 'IND BBB-' from 'IND BB+' and the outlook remained positive.

India Ratings said that the upgrade reflected an improvement in India’s (EIIL’s) financial profile and liquidity position in 1HFY21, which was continuing in 2HFY21 backed mainly by a substantial improvement in profitability.

The positive outlook reflects Ind-Ra’s expectations of a further improvement in the business profile and the liquidity position over FY22 aided by the sustained performance of the batteries and flashlight segments, the likely improvement in the performance of the lighting and appliance segments, a possible resolution of the contingent liability issue and the possibility of a managerial/board representation by the Burman family, the largest shareholder of EIIL, the rating agency said.

ALSO READ: Hero Future Energies appoints Srivatsan Iyer as the new global CEO

Among key rating drivers were an improvement in financial profile backed by substantial EBITDA expansion in FY21. Despite a fall in revenues due to Covid disruptions, EIIL’s profitability had improved and it recorded a significant jump in EBITDA margins.

expects EIIL’s EBITDA margins over FY21-22 to stabilize at 14-16 per cent, helped by the improved performance of the lighting and appliance segments over 2HFY21-FY22.

However, even as the company was doing operationally well, the holding of promoters – the Khaitan family – dropped to around five per cent from 23 per cent in March. The Burman family holds about 19.8 per cent in EIIL and is the largest shareholder. So far, the Burmans don’t have board representation in the company.

The rating agency also noted that the credit metrics of the company had improved and was expected to sustain over FY21-22. EIIL’s liquidity position, too, has improved over year-to-date FY21.

The Eveready stock closed at Rs 212.90 on the Bombay Stock Exchange. In the last three months, it has appreciated about 44.29 per cent.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, January 05 2021. 17:19 IST
RECOMMENDED FOR YOU
.