Moody’s affirms UltraTech Cement’s Baa3 ratings with stable outlook, cites strong credit metrics – EQ
In Short : Moody’s has confirmed UltraTech Cement’s Baa3 ratings with a stable outlook, highlighting the company’s robust credit metrics. This reflects confidence in the company’s financial strength and stability.
In Detail :
The cement manufacturer’s credit profile is robust, considering its extensive and successful operating history, Moody’s says.
Moody’s Investors Service Inc. has affirmed UltraTech Cement Ltd.’s ‘Baa3’ issuer rating as well as its ‘Baa3’ senior unsecured rating on Wednesday, citing a solid balance sheet and substantially strong credit metrics.
The ratings agency also maintained the ‘stable’ outlook of the Aditya Birla Group’s flagship company, according to a release.
The cement manufacturer’s credit profile is robust, considering its extensive and successful operating history, Moody’s said. “This is indicated by a gross debt/Ebitda ratio below 1 time and substantial cash flow generation to finance its significant investments.”
“The affirmation reflects UltraTech’s solid balance sheet and substantially strong credit metrics for its ‘Baa3’ ratings,” Kaustubh Chaubal, senior vice president at Moody’s, said.
The company’s dominant position in each of its operating markets within the nation, cost-effective operations and prudent financial policies are a few of the rationale behind the rating agency’s decision to give a stable outlook.
Moody’s projects India’s demand for cement to grow annually at approximately 6% over the upcoming years, primarily driven by the housing sector. “India’s escalating urbanisation and development of infrastructure, such as roads, ports, and airports, will further bolster cement demand.”
After the acquisition of Kesoram Industries, Moody’s had said it would cement UltraTech’s foothold in southern India, where it currently holds around 11% of the market, as compared with 22% capacity share across India.
Shares of UltraTech closed 2.1% higher at Rs 10,167.9 apiece on the BSE, as compared with a 0.86% advance in the benchmark Sensex.
