Announcement under Regulation 30 (LODR) - Revision in Credit Rating of the Company
Price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
Awaiting price reaction for this filing.
Akar Auto Industries Ltd has received a credit rating upgrade from Infomerics Valuation and Rating. The long-term bank facility rating moved up from IVR BBB-/Stable to IVR BBB/Stable, and the short-term rating improved from IVR A3 to IVR A3+, on a total enhanced limit of Rs. 100.34 crore. The upgrade reflects stronger business diversification, benefits from a 7 MW solar power project that should cut power costs, and a positive demand outlook driven by the recent GST cut on commercial vehicles from 28% to 18%. FY25 financials showed revenue of Rs. 377.17 crore (up 2%), EBITDA of Rs. 26.63 crore (margin improved to 7.06%), and PAT of Rs. 6.46 crore, with overall gearing improving to 1.36x. Despite the upgrade, the rating agency flagged the company's leveraged capital structure, intense auto-component competition, and exposure to commercial vehicle cyclicality as ongoing risks.
Positive for shareholders — the rating upgrade signals improving creditworthiness and lower borrowing risk, which could translate into better loan terms. Short-term, the stock may see a modest positive reaction, though the company's small scale and leveraged balance sheet remain watchpoints.