JK Tyre slips on ratings downgrade
JK Tyre & Industries on Saturday informed the bourses that rating agency CARE has downgraded its ratings on various facilities of the company.
The downward revision was triggered by the lower-than-expected cash accruals, leading to low coverage and return indicators and slower than expected deleveraging at the consolidated level, which has led to weakening of the company’s overall financial and liquidity profile. Further, the rating revision also factors in the working capital-intensive nature of its operations and exposure to foreign currency fluctuation risks, raw material prices volatility and competitive nature of the industry.
The rating agency downgraded JK Tyre’s ratings on both long term and short term facilities and fixed deposits of the company. Long term facilities have been downgraded to A Negative from earlier A+ Negative. Also, ratings on short term facilities have been revised down to A1 from A1+. The ratings on FDs too were downgraded to A Negative from A+ Negative.
Besides, CARE had recently downgraded the rating on the company’s commercial papers citing similar reasons.
On Monday, the stock opened at Rs. 79.10 and slipped by 4.7 per cent and made an intra-day low of Rs. 75.35 on the BSE.