Sutlej Textiles and Industries Limited announces revision of credit ratings

Sutlej Textiles and Industries Limited announces revision of credit ratings

The credit ratings of Sutlej Textiles and Industries Limited have been revised as under by CARE:

CARE A; Stable (Single-A; Outlook: Stable) for long term fund based loans from CARE A+; Stable (Single A Plus; Outlook: Stable);

CARE A; Stable / CARE A1 (Single A; Outlook : Stable / A One) for fund based – long term / short term – cash credit / export packing credit / pre-shipment foreign currency facilities from CARE A+; Stable / Care A1+ (Single A Plus; Outlook: Stable / A One Plus); and

CARE A1 (A-One) for non-fund based short term letters of credit/bank guarantee facilities and Commercial Papers from CARE A1+ (A-One Plus).

The revision of ratings assigned to the bank facilities of the Company factor in the weakening of the Company’s credit profile in FY20 on account of deteriorating operational performance and H1FY21 in the wake of COVID-19 pandemic, delays and cost overruns in setting up the margin accretive green fiber plant, and lower than envisaged performance in the home-textile division.

The ratings continue to derive strength from a strong business profile being amongst India’s well-established players in the value-added dyed spun yarn/specialty yarn segment and experienced management in the Textile industry (especially the spinning segment). The ratings also factor in moderate debt coverage metrics and a comfortable liquidity position.

The ratings are further tempered by the working capital intensive nature of operations, susceptibility to fluctuation in raw material/product prices, and fluctuation in foreign exchange imparting volatility to profitability and cyclical & competitive and fragmented nature of the industry.

Shares of SUTLEJ TEXTILES & INDUSTRIES LTD. was last trading in BSE at Rs.46.05 as compared to the previous close of Rs. 47.2. The total number of shares traded during the day was 40701 in over 487 trades.

The stock hit an intraday high of Rs. 48.5 and an intraday low of 45.6. The net turnover during the day was Rs. 1918176.

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