Balkrishna Industries Share Price Surges After Crisil Rating
Balkrishna Industries share price surged up by a robust 6 per cent after Crisil reaffirmed rating for Balkrishna Industries to AA- for Long term debt. The share price is currently trading at Rs 827.95, up by 5.55 per cent.
Balkrishna Industries share price made a new 52 week high of Rs 842.00. The share price opened at Rs 793.90 from a previous closing of Rs 784.40, marking a gap up of almost 20 points.
As per Crisil
The ratings continue to reflect Balkrishna Industries’ robust financial risk profile because of a healthy capital structure and adequate debt protection metrics, gradually increasing market share in the off-highway tyres (OHT) segment, and strong operating efficiency. These strengths are partially offset by vulnerability of operating profitability to fluctuations in prices of raw materials, mainly natural rubber as well as delay in improving capacity utilisation.
Financial risk profile is expected to remain sound over the medium term, backed by sufficient accrual, strong capital structure and adequate debt protection metrics. Cash accrual of Rs 7–8 billion over the medium term will sufficiently repay debt and fund capital expenditure (capex) and working capital requirement. Gearing was 0.69 time as on 31st March, 2016 and is expected to improve to 0.15 time as on 31st March, 2019, because of debt repayment and efficient working capital management. Healthy profitability and low interest cost will keep debt protection metrics healthy.