CRISIL assigns 'AAA/Stable' rating to L&T's NCD issue
CRISIL Ratings has assigned its 'CRISIL AAA/Stable' rating to Larsen & Toubro's (L&T's) Rs.1,000 million inflation linked capital indexed non-convertible debenture issue. CRISIL has also reaffirmed its ratings on L&T's existing debt instruments and bank facilities at 'CRISIL AAA/FAAA/Stable/CRISILA1+'.
CRISIL rates corporate India's first inflation-indexed debentures
The ratings continue to reflect L&T's dominant position in the engineering and construction (E&C) market in India, its diversified revenue profile, and its strong financial flexibility. L&T's strong positioning is reflected in its robust order inflows and order book despite challenging market conditions. The company received orders of Rs.601 billion (Rs.494 billion during the corresponding period of the previous year) in the nine months ended December 31, 2012, leading to a strong order book of Rs.1623 billion (Rs.1464 billion) as on December 31, 2012.These rating strengths are partially offset by L&T's increasing exposure to risks related to large infrastructure developmental projects being undertaken by its various special purpose vehicles, including those under its subsidiaries, L&T Infrastructure Development Projects Ltd and L&T Power Development Ltd.Outlook: StableCRISIL believes that L&T will maintain its leadership position in the E&C space in India, and that the company is well positioned to benefit from the large infrastructure spending in the country, over the medium term. CRISIL also believes that L&T will maintain its accruals despite the challenging market conditions for the E&C industry and will continue with its diversified project-mix strategy to mitigate concentration risks and profitability pressures. The outlook may be revised to 'Negative' if L&T's exposure to developmental projects leads to more-than-expected deterioration in its capital structure.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions 
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