According to a regulatory filing, ratings agency CareEdge has upgraded Indo Count Industries Limited's long term banking facilities to AA-, indicating that they are stable.
The agency also reaffirmed ratings for ICIL's short term banking facilities, which are now A1+. CareEdge further elaborated that the revision in the ratings assigned to the bank facilities of Indo Count Industries Limited (ICIL) factors in the sustained improvement in the overall credit profile of ICIL over the past two years.
The business risk profile has improved with a total operating income (TOI) growth of 19 per cent and 16 per cent in FY21 and FY22, respectively, driven by improved demand, leading to higher volumes and realisations, resulting into higher revenues and improved profitability.
Despite the partial debt-funded capex plans in FY23, the financial risk profile is expected to remain comfortable, supported by a healthy capital structure and debt coverage metrics. The steady accretion to reserves and scheduled debt repayments will aid the financial risk profile to improve over the medium term.
Furthermore, the ratings continue to derive strength from its strong business profile – being one of India’s leading home textile suppliers with the highest processing capacity (post-acquisition of GHCL’s home textile division) and exporters of bed linen with a global reach, experienced promoters in the home textiles segment, and the reputed clientele profile.
The ratings are, however, tempered by risks of the concentration of products, customers, and geography; the susceptibility to fluctuations in raw material prices and foreign exchange, both imparting volatility to profitability; and the cyclical and competitive nature of the home textile industry.
