New Delhi: The ratings of Bharat Heavy Electricals Limited (BHEL) have become lowered from 'IND AAA' to 'IND AA+'.
"Ind-Ra (India Ratings) has downgraded Bharat Heavy Electricals Ltd's (BHEL) long-term issuer rating to 'IND AA+' from 'IND AAA'. Simultaneously, all ratings have been removed from Rating Watch Negative (RWN) and a negative outlook has been assigned to all long-term ratings," BHEL said on Wednesday.
Over FY13-16, the revenue of BHEL has declined to 47% because of low order intake over FY12-FY15 and the existence of slow moving projects for Rs 50,000 crore in its order book in FY16.
“Revenue declined 15 per cent year-on-year to Rs 25,100 crore, as against India Ratings' expectation of revenue growth in FY16.” According to provisional FY16 financials.
"The negative outlook reflects IndRa's expectations of a further revenue decline over FY17, if issues related to the slow moving order book are not resolved," it said.
BHEL looks after the areas such as defence, water, transportation, transmission and industrial products for revenue purpose.
“During FY16, BHEL commissioned 15GW, up 26 per cent year-on-year, which is likely to aid revenue generation and debtor reduction,” the filing said.
"Any significant debt led investment or acquisition and/or a significant decline in order inflow, leading to a further decline in the revenue, and/or non-improvement in the EBITDA margins and/or an increase in the working capital cycle could lead to a negative rating action," the filing said.