CARE Ratings Limited has reaffirmed the credit ratings for Trident Limited’s bank facilities at CARE AA; Stable for long-term facilities and CARE A1+ for short-term facilities. The reaffirmation reflects the company’s stable operating and financial performance, comfortable capital structure, strong liquidity, and support from fiscal incentives. The outlook remains stable, anticipating continued market position and healthy cash accruals.
Trident Limited Credit Ratings Affirmed
CARE Ratings Limited has reaffirmed the credit ratings assigned to the bank facilities of Trident Limited. The long-term facilities have been rated as CARE AA; Stable, while the short-term facilities retain their rating of CARE A1+. This reaffirmation underscores the consistent financial health and operational strength of the company.
Key Factors Driving Reaffirmation
The rating agency cited several key strengths contributing to the reaffirmation. These include Trident’s experienced management team, its diversified and integrated operations across the textile value chain, and strong customer relationships with reputed global brands in its home textile segment. The company’s stable operating and financial performance, coupled with a comfortable capital structure and robust liquidity, were also significant factors. Furthermore, continued support from fiscal incentives available to the textile sector provides a positive underpinning.
Outlook and Financial Performance
The outlook for Trident Limited remains Stable. This reflects the expectation that the company will maintain its market position and generate healthy cash accruals. While a planned debt-funded capex programme of ₹4,650 crore is expected to moderate the financial risk profile during its implementation, it is anticipated to gradually improve post-commissioning and ramp-up of expanded capacities. The company’s ability to manage its debt obligations and leverage indicators during this period is a key monitorable.
Rating Sensitivities
Positive rating actions could arise from significant growth in scale of operations leading to improved PBILDT margins and ROCE, or a sustained improvement in net debt/PBILDT and TOL/TNW ratios. Conversely, negative actions could result from a sustained deterioration in the capital structure with net debt/PBILDT exceeding 2.00x, or significant elongation in the operating cycle leading to moderation in liquidity.
Source: BSE
