CRISIL has changed its outlook on the long-term bank facilities of Faze Three Autofab Limited (FTAL; formerly known as Aunde Faze Three Autofab Ltd) to 'Stable' from 'Negative' while reaffirming the rating at 'CRISIL BB'. The short-term rating has been reaffirmed at 'CRISIL A4+'.
The change in outlook reflects improvement in the business risk profile as reflected in operating profit margin of 9.5% in the nine months of fiscal 2020 as against operating loss for the corresponding period of the previous fiscal. The improvement has been driven primarily by growth in revenue on account of increasing market share of FTAL in domestic market to 45-50% in the current fiscal from under 40% a year ago and addition of export business along with stable key raw materials prices as compared to last fiscal. Prices of key raw materials are influenced by crude oil price and dollar rate movement which had fluctuated adversely during April 2018 to October 2018 which have been broadly stable since then. The company also has been part of most new vehicle launches across OEMs leading to increase in revenues and better margins. Besides, the company has received price adjustments based on representation and discussion with customers pertaining to abnormal increase raw material cost for fiscal 2019. The realized amount is approximately 20% of the total overall impact during fiscal 2019 amounting to Rs 2.21 crore in the current fiscal. Increase in profitability has also led to improvement in debt protection metrics, as reflected in expected interest coverage ratio of over 3 times for fiscal 2020 as against negative 0.9 time for fiscal 2019. Sustenance of the operating margin would be a key monitorable over the medium term.
The rating continues to reflect FTAL's long presence since 1997 in the automotive fabrics business, established relationships with original equipment manufacturers (OEMs), and comfortable financial risk profile. These strengths are partially offset by exposure to risks of cyclicality in end user automobile industry, susceptibility to volatility in raw material prices and working capital-intensive operations.
Shares of Faze Three Autofab Ltd was last trading in BSE at Rs.19.95 as compared to the previous close of Rs. 21. The total number of shares traded during the day was 10 in over 1 trades.
The stock hit an intraday high of Rs. 19.95 and intraday low of 19.95. The net turnover during the day was Rs. 199.