Ind-Ra affirms 'IND AAA' rating on UltraTech

Ratings agency India Ratings has affirmed UltraTech Cement and its borrowings 'IND AAA' with a stable outlook on the basis of a strong market position and line-up of acquisitions along with a good cash flow generation and liquidity. However, if net leverage (net debt to EBITDA ratio) hovers above 1.5x due to an unexpected debt-funded expansion or acquisition, a reduction in buffer cash and securities without a commensurate reduction in gross debt or delays in the integration of acquired assets, it could result in a rating downgrade, Ind-Ra said. With a 92.5 MT per annum capacity, the Aditya Birla-led UltraTech Cement is the largest cement maker in the country, poised to become the world's third largest company excluding China after its acquisition of the cement business of Century Textiles and Industries which will take the cement maker to 105.9 MT. It has also placed a bid for the distressed Binani Cement that is awaiting final nod from the insolvency tribunal NCLT.