CGL manufactures power and distribution transformers as well as electrical products for industrial and consumer use. Fitch Ratings has revised India-based Crompton Greaves Limited's (CGL) Outlook to Negative from Stable. Its National Long-Term Rating has been affirmed at 'Fitch AA+ (ind)', according to BL report.
The outlook revision reflects the recent significant increase in CGL’s net financial leverage from FY12 levels. This is driven by a sharp rise in its debt levels amid the declining trend of its operating margins.
Fitch has included CGL’s liquid investments, debt-oriented mutual funds as cash equivalents, and bills discounted as part of debt.
Fitch estimates debt levels to have risen 60 per cent to 70 per cent from FY12 (year-end March) levels following the acquisition of ZIV group (Spain) in July 2012. The Euro 150 million acquisitions were funded by a mix of debt and internal accruals.
