CRISIL has upgraded its ratings on the commercial paper and bank facilities of Shankara Building Products Limited (Shankara; part of the Shankara Buildpro group) to 'CRISIL A/Stable/CRISIL A1' from 'CRISIL A-/Stable/CRISIL A2+'.
The upgrade reflects strong operating performance on account of continued business and infrastructure scale-up and increasing focus on retail operations; further supported by geographically diversified revenue and customer profiles. Operating margin continued to improve on the back of increase in revenue contribution from manufacturing. Operating performance will remain strong over the medium term on the back of healthy demand from end-user industry, few retailers providing multiple building products under one roof, and plan to increase retail presence by organic and inorganic expansions. This is likely to lead to higher accrual of over Rs 88 crore, which will be available to fund a new store and meet incremental working capital requirement. Hence, financial risk profile will remain robust over the medium term.
The ratings continue to reflect the Shankara Buildpro group's established presence in the building material distribution and retailing businesses, diversified product offering, geographical diversity, extensive experience of promoter, long association with vendors, and track record of profitable growth. These strengths are partially offset by presence in an industry where demand is linked to economic cycles and susceptibility of operating profitability to any sharp variation in raw material prices.
Shares of Shankara Building Products Ltd was last trading in BSE at Rs.1385.3 as compared to the previous close of Rs. 1453.05. The total number of shares traded during the day was 10803 in over 951 trades.
The stock hit an intraday high of Rs. 1478.65 and intraday low of 1345. The net turnover during the day was Rs. 15075659.