Hitachi ABB Power Grids in India Gets CRISIL AAA/Stable Rating for Bank Facilities

Rating agency CRISIL has assigned its ‘CRISIL AAA/Stable/CRISIL A1+’ ratings to the bank facilities of ABB Power Products and Systems India Ltd (APPSIL), the listed Indian entity of Hitachi ABB Power Grids.

January 05, 2021. By Manu Tayal

Rating agency CRISIL has assigned its ‘CRISIL AAA/Stable/CRISIL A1+’ ratings to the bank facilities of ABB Power Products and Systems India Ltd (APPSIL), the listed Indian entity of Hitachi ABB Power Grids.

This reflects the company’s healthy business risk profile driven by strong market position in the power grid segment, with diversified business portfolio, geographical diversification and strong clientele.

It also reflects the robust financial risk profile, marked by the absence of any debt and strong net worth of more than Rs 800 crore as on September 30, 2020.

On the rating assigned, CRISIL noted that “despite the pandemic-led economic disruptions during fiscal 2020, APPSIL’s business risk profile should remain strong, driven by established market position and healthy order book of Rs 5,175 crore as on September 30, 2020. Moreover, the company has ample liquidity driven by cash equivalents of Rs 177 crore, and access to fund-based bank limits of Rs 936 crore as on September 30, 2020, which remain unutilized.”

These strengths are partially offset by susceptibility of profitability capital investment cycles and project implementation risks, largely on account of exposure to structural issues in the power sector, and intense competition in the capital goods industry, it added.

CRISIL said that it has considered the standalone business and financial risk profiles of APPSIL and has applied its parent notch-up framework to factor in the extent of support available to APPSIL from its ultimate parent, Hitachi Ltd.

On the Outlook which has been assigned as Stable, CRISIL believes that APPSIL will continue to benefit from its established market position, strong clientele and being part of a strong parent; and will maintain its robust financial risk profile given its conservative financial policy.

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