ICRA assigns IrAA rating to Tata Metaliks Ltd

New Delhi, Mar 30 (UNI) Rating agency ICRA has assigned an IrAA Issuer Rating to Tata Metaliks Ltd (TML), indicating high credit-quality.

The rated entity carries low credit risk and the outlook on the rating is stable.

The rating takes into account TML's dominant position in the domestic foundry grade pig iron industry especially in the Eastern region, its strong operating profile aided by its focus on technology, healthy profitability and comfortable coverage indicators as well as strong management capabilities.

The rating also reflects TML's recent acquisition of the pig iron capacity of Usha Ispat Ltd at Karnataka, which is likely to enhance TML's competitive position within the industry. The rating is however constrained by the cyclicality inherent in the pig iron business and limited vertical integration in TML's operations, which makes its cashflows sensitive to fluctuations in prices of end product as well as key raw materials.

However, the impact is expected to be cushioned to an extent by TML's cost leadership status, superior level of customer engagement and a conservative capital structure.

UNI SS SR BD1843