India Ratings and Research (Ind-Ra) has downgraded HPL Electric & Power Limited’s (HPL) Long-Term Issuer Rating to ‘IND BBB+’ from ‘IND A-‘. The Outlook is Stable.
Ind-Ra continues to take a consolidated view of HPL and its subsidiary, Himachal Energy Private Limited (‘IND BBB+’/Stable), to arrive at the ratings, due to the strong operational, legal and strategic linkages between the two companies.
The downgrade reflects HPL’s sustained elongated working capital cycle and continued spending on capex leading to higher-than-expected net leverage (net debt/EBITDA) on trailing 12-month (TTM) basis of 4.1x for 9MFY20 (FY19: 3.7x, FY18: 4.4x) and gross interest coverage (EBITDA/interest expense) remaining moderate at 2.1x (2.3x, 2.2x).
Shares of HPL Electric & Power Ltd was last trading in BSE at Rs.24.55 as compared to the previous close of Rs. 22.9. The total number of shares traded during the day was 7640 in over 206 trades.
