New Delhi, July 21: Credit rating agency ICRA today assigned the highest safety 'A1' rating to the Rs 40 crore Commercial Paper issue of Escorts (EL), even as it found that the company's performance continues to be adversely affected by persistent pressure in tractor industry. Finding that the financial support in the form of letter of comfort from EL's subsidiary -- Escorts Heart Institute and Research Centre, the credit rating agency, however, said the EL's weak operating profitability and significant repayment in the short to medium term would keep the cashflows under pressure. ICRA noted that the losses from operation after interest and depreciation rose to Rs 230 crore in 2002-03 as compared to Rs 80.3 crore in the previous year. "EL will remain critically dependent on the timing and level of its divestment of its telecom venture," it said.
The company's non-convertible debenture of Rs 150 crore was given a moderate safety 'LBBB' rating by ICRA.
Bureau Report