Fenner (India) gets AA minus

Crisil has assigned AA minus (double A minus) to Fenner (India's) Rs. 50 crore NCD programme. The outstanding rating on the fixed deposit programme has been downgraded from FAA plus (F double A plus) to FAA (F double A) and the outstanding rating of P1 plus (P one plus) on the Rs. 40 crore commercial paper issue has been reaffirmed.

Fenner's rating incorporates the diversified business profile, strong market position in its main product lines (V-belts, oil seals and conveyor belting), the favourable capital structure and stable financial performance of the company. Partly offsetting these are the sharp decline in performance of the material handling division, pressure on the performance of the polymer division, increasing exposure to group companies and high level of debtors.

Fenner is engaged in the manufacture of power transmission belts, oil seals, conveyor belts, cotton yarn and material handling systems. The company has a fairly diversified business profile with the polymer division, textiles division and the material handling division accounting for 57 per cent, 23 per cent and 20 per cent respectively, of the turnover of the company in 2000-01.

The diversity of the income stream with minimal dependence on any one sector of the economy acts as a hedge and partially shields the performance of the company in the event of a downturn in any one of the divisions. For the year ended March 2001, the company recorded a net profit of Rs. 7.67 crores on an operating income of Rs. 202.24 crores.

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Section  : Business
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