Stock Report

India Ratings Upgrades DCW to 'IND A' / Stable

Posted On : 2023-03-17 21:22:17( TIMEZONE : IST )

India Ratings Upgrades DCW to 'IND A' / Stable

India Ratings & Research Private Limited ("Credit Rating Agency") on March 15, 2023, has upgraded ratings for the financial facilities of DCW Limited ("the Company") from 'IND A-' to 'IND A'.

Commenting on this development, Mr. Vivek Jain, Managing Director, DCW Ltd, said, "We are thrilled to see our credit rating upgraded due to our strong performance in both our commodity and specialty businesses. We have significantly improved our credit metrics due to strong profitability and debt refinancing. This is a testament to the hard work and dedication of our team at DCW Limited, and we remain committed to delivering value for our stakeholders. This is also the Companies best Credit Rating over the foreseeable past. Going forward, I expect our EBITDA to keep improving due increased Capacity utilization across segments and our growing footprints into the specialty business."

This upgrade reflects the Company's strong financial performance and commitment to maintaining exacting standards. DCW Limited's credit rating has been upgraded due to several key reasons, as stated by the Credit Rating Agency:

1. Robust performance in both its commodity and specialty businesses.

2. India Ratings and Research (Ind-Ra) believes that DCW's EBITDA will likely hit a historical high in FY23 due to solid realizations and an increase in utilization due to customer tie-ups in the specialty business.

3. Demand for PVC/CPVC products remains robust due to the government's focus on growth in irrigation, affordable housing, and infrastructure projects.

4. Significant improvement in credit metrics due to strong profitability and debt refinancing, including refinancing INR 3.3 billion of NCDs through bank loans at a significantly lower interest rate and converting INR 0.3 billion of OCDs into equity.

5. Reduction of net debt (including acceptances) to INR 5.2 billion at the end of December due to robust performance and shoring up its working capital to INR 1.2 billion at the end of September 2022 to optimize its supply chain.

6. Refinancing and reducing interest-bearing customer advances and external intercorporate deposits has significantly reduced interest costs and improved its credit metrics, with the net leverage expected to remain below 1.5x.

Shares of DCW Limited was last trading in BSE at Rs. 47.07 as compared to the previous close of Rs. 46.48. The total number of shares traded during the day was 37783 in over 472 trades.

The stock hit an intraday high of Rs. 47.31 and intraday low of 46.00. The net turnover during the day was Rs. 1775206.00.

Source : Equity Bulls


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