Brickwork Ratings (BWR) has upgraded Indian steel pipe producer Rama Steel Tubes Limited’s (RSTL) long-term rating to “BWR BBB” with ‘a stable outlook’ and its short-term rating to “BWR A3+” for bank loan facilities, a regulatory filing said on Tuesday, December 21.
“The ratings upgrade is a significant improvement in the business and financial risk profile of RSTL in the fiscal year 2020-21 and the first half of 2021-22. The business profile of the company has improved through the increase in overall capacity from 168,000 mt to 228,000 mt, leading to an increase in revenue and earnings before interest, depreciation, tax and amortization,” BWR said in a statement.
“The rating continues to derive comfort from the company’s experienced promoters, established long-term track record of over four decades, diversified product portfolio and geographical presence. However, these strengths are partially offset by the working capital-intensive operations, susceptibility of cyclicality and fluctuations in raw material prices, and intense competition in industry,” BWR said.
RSTL is a manufacturer of poles, pipes, tubes and structural steel products and also an exporter of hollow sections used in the automobile industry.