ICRA reaffirms A1+ to Hindustan Sanitaryware CP/STD program
ICRA reaffirms A1+ to Hindustan Sanitaryware CP/STD program Credit rating agency ICRA reaffirmed A1+ rating to the commercial paper/short-term debt programme of Hindustan Sanitaryware & Industries (HSI) for an enhanced amount of Rs 800 million, indicating highest credit quality in the short-term. The rating action takes into account the company`s operational strengths in its main business lines, which include sanitaryware and glass container, higher profit and cash accruals due to growing volumes as well as reduction in working capital intensity and improved financial risk profile arising from conversion of fully convertible debentures (FCDs) into equity. ICRA also considered the cyclical nature of its glass containers business and its cap ital-intensive operations, which may continue to have an impact on its returns and margins. The short-term rating also draws support from comfortable liquidity of the company arising out of adequately undrawn bank limits. The company`s funding plan for its expansion programs including the proposed diversification into the retail business will remain a key credit rating driver. HIS manufactures and markets sanitaryware under the brand names Hindware, Hindware Art and Hindware Italian Collection (targeted at the higher end of the market) and Raasi (aimed at the lower end of the market). The company reported profit after tax of Rs 291 million on operating income of Rs 4.81 billion, in financial year 2006-07. Shares of the company closed up Rs 0.40, or 0.50%, at Rs 79.85. The total volume of shares traded were 47,896 at the BSE. (Wednesday)
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