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The assigned ratings to MLCF incorporate the company's market position as one of the leading cement players in the country. Ratings also reflect the company's satisfactory and efficient operations with MLCF being one of the low cost producers in the cement sector. Ratings are constrained by current challenging sector dynamics and weakening in financial profile over time. However, MLCF's reprofiling of all long-term debt till end-FY21 from proceeds of rights issue provides support to ratings. Comfort is drawn from healthy financial profile, ample liquidity of
Business risk profile incorporates cyclical nature of the cement industry. Over the last one year, cement sector has entered competitive phase with increasing capacities exerting pressure on selling prices which has been compounded by rising cost of inputs. Demand patterns synchronizing with substantial supply side dynamics will be important for improvement in sector dynamics. In this regard, proposed commencement of infrastructure projects would support dispatches and sector outlook. VIS expects sector dynamics to improve gradually over the rating horizon although short-term dispatches may be impacted due to recent coronavirus outbreak.
For more information, contact:Director Compliance and Rating Analytics,VIS Credit Rating Company LimitedVIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,Phase VII, DHA,
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