ICRA assigns IrAAA rating to Hero Honda Motors Ltd
New Delhi, June 5 (UNI) ICRA has assigned an issuer rating of IrAAA indicating highest-credit-quality to Hero Honda Motors Ltd (HHML).
The rated entity carries lowest-credit-risk.
The rating is an opinion on the general creditworthiness of HHML and not specific to any particular debt instrument.
ICRA also has re-affirmed the LAAA rating assigned to the Rs 150 million Non-Convertible Debenture Programme of HHML. This is the highest-credit-quality rating assigned by ICRA.
The rated instrument carries the lowest credit risk. The assigned ratings take into account HHML's dominant position in the domestic motorcycle industry, its strong financial profile characterized by low gearing, large liquid investment portfolio and strong operating cash accruals.
The rating also takes into account the intensifying competition in the domestic two-wheeler industry with the entry of new players and new model launch, competition led pricing inflexibility and increasing costs leading to declining operating margins and limited opportunity for HHML to diversify geographically.
HHML was promoted as a joint venture company (both promoters holding 26% of equity) in January 1984 by Hero Cycles Ltd and Honda Motor Company (HMC), Japan and is engaged in the business of manufacturing and marketing of motorcycles and scooters.
UNI MP ARB RAI2037