Dwarikesh Sugar Industries Ltd (DSIL), a leading sugar producer in the country, has got upgraded credit rating from rating agency ICRA for its Rs. 599.99 crore Line of Credit.
The Rating Committee of ICRA, after due consideration has upgraded the long-term rating to [ICRA]A+ (pronounced ICRA A plus) from [ICRA]A- for the Rs. 599.99 crore Line of Credit of the company. The outlook on the long-term rating is stable.
According to ICRA rationale, “the rating upgrade factors in the better-than-anticipated operational and financial performance of DSIL in FY2017 as well as the fact that the bulk of its operational cash flows have been used to reduce debt levels and thereby, improve debt metrics.”
“This apart, ICRA has factored in the continued favourable outlook for its core sugar business in FY2018, supported by the recent hike in import duty and a tight domestic stock situation. This is likely to support the sugar prices in the near term, and is expected to result in healthy profits and accruals in FY2018 as well.”
“Consequently, ICRA expects DSIL to use these cash flows for further debt repayment and largely complete its long-term debt obligations by March 31, 2018. The ratings continue to factor in the company’s forward integration into cogeneration and distillery businesses, which provide alternate revenue streams and reduce the impact of the cyclicality of the sugar business to an extent.”
ICRA’s full Report on DSIL and Rationale on this credit rating can be accessed on the company’s website also. Here is the website link for full access of the rationale http://www.dwarikesh.com/cms/newsimages/file/july%202017/ICRA%20credit%20rating%20Rationale_July%202017.pdf