Owing to Mahindra and Mahindra Ltd.’s (M&M) stupendous performance in the auto and farm equipment sectors month after month, the company’s credit rating has been upgraded to ‘AAA’, by CRISIL.
The triple-A (as it’s commonly referred to) rating is the agency’s highest level of rating and CRISIL assigned it to the Indian 4×4 major for the long-term bank facilities and Non-Convertible Debenture (NCD) programme of M&M while reaffirming the rating on M&M’s short-term facilities and debt programme at CRISIL A1+.
The highest credit rating reflects a healthy business profile for the Indian company along with highlighting CRISIL’s belief that M&M will maintain a strong financial risk profile driven by positive free cash flows and robust financial flexibility arising from the significant market value of its holdings. CRISIL also believes that M&M’s management will continue its prudent acquisition and investment policy.
The upgrade in credit rating also takes into account Mahindra’s ability to maintain its market share, driven by its proven product development capability and improving revenue diversity in the core auto and farm equipment businesses and at the group level as well. As per Anand Mahindra, Chairman, Mahindra Group, it’s happened for the first time in the history of M&M that four agencies, including CRISIL have upgraded Mahindra’s credit rating to the highest AAA!
Mahindra has just launched the all-new Scorpio and is also rigorously testing at least 4 more vehicles (that we know of) that would be launched in the next 12 odd months. Moreover, it’s two-wheeler business is also settling down to fairly consistent sales and so are its commercial vehicle sales and agricultural vehicles & equipment sales.