ASTL has announced BMR of its SITE plant, which apart from costs saving would enhance the plant capacity by 95,000 tons.
Losing 2.6%CYTD, ASTL's lackluster price performance is attributable to the delay in materialization of expansion project.
Dhabeji expansion to commence operations by end Mar'18 after 14 months delay due to Phase II expansion, Dhabeji plant that amplifies ASTL's melting/rolling capacity by 2/2.3x is expected to start commercial operations by end Mar'18.
On the sector front; banks added 164 points, Ferts 93 points, OMCs 67 points, Cement 58 points, Engineering surged 38 points with all four stocks ISL, INIL, ASTL
and CSAP hitting their upper limit; whereas Food shed 14 points.
ASTL is primarily engaged in producing cotton and polyester-cotton yarn.
ICRA also reaffirmed the A4 rating outstanding on the INR8m non-fund-based (sub-limit) facilities of ASTL.
The reaffirmation of the ratings takes into account ASTL's weak financial profile characterised by significant accumulated losses, high gearing and stretched coverage indicators.
We do highlight that ASTL
plans to raise money via a mix of debt to equity and although we await further guidance from the management, we cannot rule out a higher quantum of debt (~75-80%).
ASTL traded at lower circuit throughout the day, post result announcement.
Besides ASTL, rest of the steel sector also bore pressure and reflected negatively on Cement sector as well.