Dhoot Transmission (DTL) jumped 4.94% to ₹1,596.50 following a significant credit rating upgrade by Crisil Ratings. The agency upgraded the company's rating on long-term bank facilities to 'Crisil AA/Stable' from 'Crisil AA-/Stable', while reaffirming its 'Crisil A1+' rating on the short-term bank facility. According to reports from Business Standard, this upgrade reflects Crisil Ratings expectations that the group's business and financial risk profile will continue to improve.
The rating upgrade is supported by the group's steady growth in scale of operations and expectations to sustain this growth in the current fiscal and medium term. As reported by Business Standard, this growth is driven by the group's established market position in the automotive component industry, long-standing relationships with marquee domestic and global OEMs, healthy order visibility, and recurring business from existing customers. The growth has benefited from gradual ramp-up of capacities commissioned over the past few years, resulting in improved utilization levels and operating leverage benefits.
Despite ongoing investments towards capacity augmentation, technology upgrades, and product diversification, the group's operating margins have remained healthy at over 15% and are likely to remain in similar range over the medium term. According to Business Standard, this is supported by integrated manufacturing operations, diversified product portfolio, and benefits from economies of scale. The group's financial risk profile has witnessed significant improvement following successful equity infusion through IPO and investment from Bain Capital, which has strengthened net worth and enhanced financial flexibility.
As reported by Business Standard, Dhoot Transmission is a leading manufacturer of automotive electrical and electronic components, including wiring harnesses, electronic sensors, controllers, switches, battery packs and interconnects, terminals, connectors, junction boxes, power distribution units, EV charging solutions and data cables. The company caters primarily to the automotive industry, serving two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, farm equipment and off-highway vehicles. Liquidity is expected to remain strong, supported by strong consolidated cash accruals, sizeable cash and bank balance and moderate utilization of working capital bank limits.
