ICRA reaffirmed the long-term rating of the auto parts manufacturer to AA- with stable outlook from AA- with negative outlook. Similarly, the term loans of the company have been reaffirmed to stable.
Shares of Sterling Tools surged 15 per cent to Rs 218.80 on Wednesday, before trading at Rs 211.20 at 10 am. BSE Sensex was trading 171.46 points, or 0.31 per cent, higher at 56,130.44 at the same time. The scrip settled at Rs 190.40 on Tuesday.
The rationale behind the upgrade stated that Sterling Tools has been stabilising its operating performance in the past few quarters, post the disruptions brought about by the pandemic and nation-wide lockdown in Q1 FY2021.
“The company is positioned as the second largest automotive fastener manufacturer in India, trailing behind only Sundaram Fasteners in terms of market share,” a regulatory filing by the company added.
Shares of Sterling Tools have underperformed in the last one year. The counter has gained only 8 per cent as against a gain of 45 per cent on the BSE Sensex.
Sterling Tools’s revenue profile is well-diversified, catering to all major automotive segments, as well as some non-automotive segments.
