Ace Designers' rating retained

ICRA has retained the A1 (A one) rating, indicating highest safety in the short term, assigned to the Rs. 2 crore commercial paper programme of Ace Designers (Ace). However, the degree of safety is marginally lower than in A1 plus rating. The rating factors in Ace's dominant position in the domestic CNC lathes market, its strong design and service capabilities, increase in its market share despite a stagnant market and expected increase in demand for CNC lathes due to favourable budget proposals.

Ace is a leading manufacturer of CNC lathes, which are predominantly used in the automobile and engineering industries for machining applications. Ace is competitively placed in the domestic market as compared to its main competitors in terms of design capability, economies of scale, service network and ability to introduce competitively priced new models. Despite high exposure to the automobile industry, which has shown signs of slowdown, Ace has managed to improve its business performance during the current financial year primarily on account of its focus on well performing OEMs and ancillaries.

Ace has a fully owned subsidiary in the U.S. - Ace International - which caters to the U.S. market. The performance of this subsidiary remains unsatisfactory leading to high receivables position for Ace. However, the company has managed to diversify its export market by exporting lathes to Italy and Korea.

Ace's liquidity has shown some strain during the current financial year on account of increase in inventories, part funding of a new project by internal accruals and its investment in AII. However, this is expected to ease with improvement in its projected cash accruals.

Corporate Bureau

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Section  : Business
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