India Ratings and Research (Ind-Ra) has downgraded Texmaco Rail & Engineering Limited’s (Texmaco) Long-Term Issuer Rating to ‘IND A-’ from ‘IND A’ while maintaining it on Rating Watch Negative (RWN).
Ind-Ra continues to take a consolidated view of Texmaco and its subsidiaries and joint ventures on account of the strong operational, legal and strategic inter-linkages among them in the form of common management, a similar line of business and strong support extended by Texmaco. The downgrade reflects Texmaco’s continued negative free cash flow (FCF), rising net debt and weaker-than-previously-expected credit metrics.
The RWN reflects the possibility of a continued stretched liquidity and high financially leveraged positions unless the company manages to improve its financial position through a rights issue, lower net working capital or improved profitability.
On Tuesday, Texmaco Rail & Engineering shares closed weaker at Rs. 27.25 at BSE, down 2.50%. (Share Manthan, 21st July, 2020)
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