Sona Koyo Steering Systems gets "A" rating
By 28 February 2000 | 28 Feb 2000
- Commercial paper programme - Rs. 9.5 crore Rating : P1(reaffirmed)
- Non convertible debenture - Rs. 5 crore Rating : A (reaffirmed)
The rating assigned to the Rs. 50.0 million Non Convertible Debenture issue of Sona Koyo Steering Systems Limited (SKSSL) has been reaffirmed at "A"(pronounced single A). The rating assigned to the Rs. 95 million Commercial Paper Programme of the company has been reaffirmed at "P1" (pronounced P one).
The ratings factor in the company’s market position in the steering systems business, technological strength arising out of its association with Maruti Udyog Limited (MUL) and Koyo Seiko Components Ltd. (Koyo Seiko) of Japan and the present upturn in the passenger car industry. The rating also factors in the company''s high degree of customer and product concentration, decline in profitability, and the increased financial risk profile characterised by higher gearing and lower interest coverage ratios.
SKSSL is engaged in the manufacture and sale of rack and pinion type steering gear, recirculating ball screw type steering gear, power steering systems, steering columns, propeller shafts, axle and differential assemblies. In 1998-99, the company registered gross sales of Rs. 1547.12 million and achieved a profit after tax of Rs. 57.34 million.