Thomas Cook India's Ratings reaffirmed by CRISIL

CRISIL has reaffirmed its ratings assigned to the bank facilities, debt programmes and corporate credit rating of Thomas Cook (India) Limited (TCIL), India's leading integrated travel services company, at "'A+/CCR A+/Negative/CRISIL A1'/ Stable".

The reaffirmation reflects the strong parent support from Fairfax Financial Holdings Ltd, healthy liquidity in the form of cash & cash equivalents against limited external debt supporting the capital structure. Further, the Company's net debt continues to be negative. The ratings also factor in the Thomas Cook India Group's dominant position in the foreign exchange business and strong brand equity in travel-related services.

Despite the adverse impact of the pandemic on the global travel and tourism sector, Thomas Cook India has witnessed sequential business recovery during the last nine months of fiscal 2021, which along with continued cost reduction measures (total cost savings of more than Rs 650 crore in fiscal 2021) has resulted in sequential reduction in operating losses. Further, TCIL had received significant fund infusion from its parent, Fairfax - Rs 436 crore of optionally convertible cumulative redeemable preference shares (OCCRPS), during March 2021. The said fund infusion mitigated impact of operating losses during the previous fiscal and provided necessary support to TCIL's liquidity.

TCIL's limited external debt and healthy liquidity in the form of cash & cash equivalents, results in comfortable cash to total external debt ratio of about 2 times as on March 31, 2021 (2.3 times as on March 31, 2020).

Mr. Madhavan Menon, Managing Director, Thomas Cook (India) Limited said, "The reaffirmation of the rating from CRISIL is a reassurance of our sound business fundamentals and financial management, despite the headwinds brought on by the pandemic. Factored in equally, is our strong brand equity and leadership positioning in the forex and travel businesses; as also the strong support from our parent Fairfax.

Our consistent efforts at reimagining our businesses coupled with effective cost management have played a key role in navigating through the past 15 months and we will continue to focus on innovation and digitization as we build momentum towards recovery.

Vaccine drives and easing of travel restrictions around the world will help accelerate the pace of business recovery."

Shares of THOMAS COOK (INDIA) LTD. was last trading in BSE at Rs.62.25 as compared to the previous close of Rs. 64.45. The total number of shares traded during the day was 118302 in over 1302 trades.

The stock hit an intraday high of Rs. 64.7 and intraday low of 61.25. The net turnover during the day was Rs. 7326027.

Source : Equity Bulls

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