Crisil Ratings has revised the outlook on Rs 4,000 crore long-term bank facilities of vertically integrated textile and paper manufacturer Trident Ltd from stable to positive.  The Rating firm also reaffirmed the rating at AA-minus. The rating on short-term bank facilities and the commercial paper program was reaffirmed at A1-plus.

Crisil said the rating action reflects healthy improvement in the financial risk profile of the company post significant reduction in debt over the last few quarters supported by the ramp-up of operational performance in home textiles division this fiscal.

 The company has reduced its debt from Rs 1,952 crore as on March 31, 2020 to Rs 1,059 crore as on December 31, 2020 through prepayments from internal accrual, controlled capex as well as non-recourse factoring initiatives.

The capacity utilisations in cotton yarn segment also reached 97 percent in the third quarter of this fiscal, higher than pre-Covid levels, partially owing to increased captive consumption for increased production of home textiles as well as the rebound in cotton yarn demand in the industry. Crisil said Trident's paper segment also has seen a ramp-up albeit gradual with utilization levels reaching 87 percent in the third quarter.

Over the medium term, the aggregate revenues are expected to grow by 15 percent per annum as against compounded annual growth rate of 2 percent during fiscal 2018 to 2020, led by continued traction in home textiles and cotton yarn as well as recovery in the paper segment as well as commissioning of planned capacity addition. The company's operating profitability has remained healthy at 18.5 percent in nine months of fiscal 2021 as against 18 percent in fiscal 2020 in spite of Covid impact in first quarter, owing to cost optimisation initiatives undertaken by the company.

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