Care Ratings has downgraded credit ratings of Hindustan Aeronautics' bank facilities worth Rs 7,300 crore. The agency in its rationale took into consideration the company's recent developments, including operational and financial performance of the state-owned entity.
Care Ratings has downgraded long term rating of Hindustan Aeronautics Ltd (HAL's) bank facilities to 'AA+' from 'AAA', with stable outlook. The agency, however, reaffirmed 'A1+' rating for short term.
The ratings of bank facilities of HAL derive strength from its strategic importance as the core aviation equipment supplier to the Indian defence sector with majority ownership by government of India. HAL plays a strategic role in India's defence program being the only Indian company having specialisation in aircraft manufacturing and providing its maintenance, repair and overhauling services (MRO).
State-run aerospace major had posted an all-time high turnover of Rs 19,705 crore for the financial year ended March 31, 2019, registering a year-on-year growth of 7.8 per cent. HAL's profit after tax (PAT) for the fiscal stood at Rs 2,282 crore, an increase of 14.8 per cent over Rs 1,987 crore in the corresponding previous year.
During September quarter, HAL posted 116 per cent growth in net profit at Rs 621 crore, compared to Rs 287 crore in the same period a year ago. Sequentially, net profit, however, rose 10 per cent from Rs 564 crore a quarter ago. Revenue from sales rose 32 per cent to Rs 3,451 crore from Rs 2,610 crore in the same period a year ago.
Shares of Hindustan Aeronautics closed Thursday's trade at Rs 723.40, up 0.98 per cent, as compared to the previous close of Rs 716.35 on the BSE. The stock hit an intraday high of Rs 737.8 and intraday low of Rs 718.
Edited by Chitranjan Kumar
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