CRISIL keeps ratings on Reitz India at BBB+/stable/P2

(ADPnews) - Dec 7, 2010 - India's rating agency CRISIL yesterday maintained the ratings of Reitz India Ltd at BBB+/stable/P2.

The agency issued the following press release:

Rs.30 Million Cash Credit Limit* BBB+/Stable (Reaffirmed)
Rs.100 Million Proposed Long-Term Loan BBB+/Stable (Reaffirmed)
Rs.300 Million Bank Guarantee** P2 (Reaffirmed)
*Including a proposed limit of Rs.20 million.
**Including a proposed limit of Rs.125 million.

CRISIL’s ratings on the bank facilities of Reitz India Ltd (Reitz India) continue to reflect Reitz India’s established presence in the domestic industrial fans market, its diversified customer base, and comfortable financial risk profile marked by low gearing and healthy debt protection measures. These strengths are partially offset by Reitz India’s exposure to risks relating to slowdown in its end-user industries, and the company’s low net worth and small scale of operations.

Outlook: Stable
CRISIL believes that Reitz India will maintain its stable financial risk profile over the medium term, on the back of its established market position leading to healthy cash accruals. The outlook may be revised to ‘Positive’ if the company successfully ramps up its capacity, and manages its working capital requirements efficiently. Conversely, the outlook may be revised to ‘Negative’ if Reitz India undertakes a larger-than-expected debt-funded capital expenditure programme, leading to deterioration in its capital structure, or in case of a decline in the company’s profitability.

About the Company
Reitz India is an Indo-German joint venture between Konrad Reitz Ventilatoren GmbH, Germany (Konrad Reitz), and Indian promoters, including Mr. Prasad Rao, and his family and friends. Konrad Reitz is one of the biggest fan manufacturers in Germany. It provides Reitz India technology for the manufacture of industrial fans; Reitz India, in turn, sub-contracts production to manufacturers in India on a job-work basis. The company caters to diverse end-user industries, such as cement, steel, power, fertilisers, and chemicals.

For 2009-10 (refers to financial year, April 1 to March 31), Reitz India reported a profit after tax (PAT) of Rs.76 million on net sales of Rs.952 million, as against a PAT of Rs.65 million on net sales of Rs.1.2 billion for the previous year.

(INR 100 = USD 2.237/EUR 1.672)

Rating agency website: www.crisil.com

Choose your newsletter by Renewables Now. Join for free!