Arvind Limited has received a significant credit rating upgrade from CARE Ratings. The agency has upgraded the company’s long-term credit rating to AA (Stable) from AA- (Stable), reflecting its superior operational and financial performance. This upgrade underscores Arvind’s strengthened credit profile and enhanced financial discipline.
Arvind Secures Major Credit Rating Upgrade
Arvind Limited has announced a crucial credit rating upgrade by CARE Ratings Limited. The agency has elevated Arvind’s long-term credit rating to AA (Stable), a significant enhancement from the previous AA- (Stable) rating. This upgrade is a direct reflection of the company’s robust operational efficiency and strong financial performance.
Key Facilities and New Ratings
The revised ratings apply to various facilities, with the Long-Term Bank Facilities now rated CARE AA; Stable. The Long-Term / Short-Term Bank Facilities are rated CARE AA; Stable / CARE A1+, with the long-term rating upgraded and the short-term rating reaffirmed. Short-Term Bank Facilities and Commercial Paper (Carved Out) have been reaffirmed at CARE A1+.
Specifically:
- Long-Term Bank Facilities (₹492.90 Cr): Upgraded to CARE AA; Stable.
- Long-Term / Short-Term Bank Facilities (₹1,549.98 Cr): Rated CARE AA; Stable / CARE A1+.
- Short-Term Bank Facilities (₹1,001.01 Cr): Reaffirmed at CARE A1+.
- Commercial Paper (Carved Out) (₹300.00 Cr): Reaffirmed at CARE A1+.
Rationale Behind the Upgrade
The rating upgrade is attributed to Arvind’s resilient and well-diversified business model, supported by a balanced geographic presence and broad product portfolio. The company has demonstrated performance exceeding industry trends, coupled with strong financial discipline and operational resilience. Over the past three years, Arvind has solidified its financial profile through consistent margin stability, improved return on capital employed (ROCE), and strengthened key credit metrics, resulting in a more robust balance sheet. The upgrade also highlights the company’s continued focus on balance sheet strength, financial discipline, business performance improvement, and maintaining healthy relationships with its lenders.
The reaffirmation of the highest short-term rating (A1+) and the upgrade of the long-term rating (AA; Stable) signify Arvind’s strong liquidity position and debt servicing capability. The enhanced credit profile provides the company with the flexibility to pursue growth opportunities while maintaining focus on margin expansion, cash flow generation, and strong credit quality.
Source: BSE
