India Ratings and Research (Ind-Ra) has assigned long-term issuer rating ‘IND A- / Stable’ to Cavendish Industries Limited (a subsidiary of JK Tyre & Industries Ltd).
The assigned rating and the stable outlook reflects, Cavendish Industries Ltd. (CIL) strong operating performance in FY21 on the strength of strong demand from replacement markets, higher operating efficiencies, leaner cost structure and higher capacity utilisation, which has resulted in improved profitability. The Company has also resorted to aggressive marketing through expansion of the dealer network in the current financial year to cater to high rural and suburb demand.
Ind-Ra further expects healthy double-digit growth in revenues on the back of robust replacement market demand on account of increased vehicle penetration in the country in FY22.
The acquisition of Cavendish Industries Ltd. (CIL) by JK Tyre in the year 2016 was strategic in nature and well considered decision to increase the manufacturing capacities at a much lower investment cost and also to enter 2/3 wheeler tyre segment. CIL's presence is primarily in the domestic replacement market and has diverse product portfolio in the truck and bus (T&B) bias and radial tyres, two/three-wheeler (2/3W) tyres and non-truck bias tyre segments.