Stocks

Eveready Industries hits lower circuit limit on credit ratings downgrade

Updated : April 30, 2019 12:29 PM IST

India Ratings and Research downgrades the company’s long-term rating with ‘negative’ outlook.

The downgrade reflects Eveready’s continued high net leverage, weakened liquidity amid continuous financial support to group firms

Eveready Industries shares hit lower circuit limit after the rating agency India Ratings and Research (Ind-Ra) downgraded the company’s long-term rating to 'IND A+' from 'IND AA-' with ‘negative’ outlook.

At 11:12 AM, the stock plunged 20 percent to Rs 116.85 per share on the BSE.

Eveready Industries

Ind-Ra in its report said, “ The downgrade reflects Eveready’s continued high net leverage and weakened liquidity amid continuous financial support extended to group companies and delayed asset monetisation.”

Ind-Ra estimates Eveready Indsutries to reduce debt by Rs 130-140 crore in FY20 for the leverage to reduce to an acceptable level, which can only be achieved by the sale of its Hyderabad assets or full repayment of Inter corporate deposits.

The rating agency also added, “Eveready’s liquidity position has weakened due to rising debt levels and increased interest costs and working capital requirements. Ind-Ra however expects the liquidity position to improve with the planned asset monetisation and the company to continue to report positive cash flow from operations in FY20.”

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Eveready Industries hits lower circuit limit on credit ratings downgrade

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