The ICRA reaffirmed the long-term rating of the auto parts maker at AA- with a stable outlook of AA- with a negative outlook. Likewise, the company’s term loans were reasserted to stable.
Sterling Tools shares jumped 15% to Rs 218.80 on Wednesday, before trading at Rs 211.20 at 10 a.m. BSE Sensex traded at 171.46 points, or 0.31%, up to 56,130.44 points at the same time. The certificate settled at Rs 190.40 on Tuesday.
The rationale for the upgrade said Sterling Tools had stabilized its operational performance in recent quarters, following the disruption caused by the pandemic and the nationwide lockdown in the first quarter of fiscal 2021.
“The company is positioned as the second largest manufacturer of automotive fasteners in India, behind Sundaram Fasteners in terms of market share,” added a company regulatory filing.
Sterling Tools stocks have underperformed over the past year. The Meter gained only 8 percent against a 45 percent gain on the BSE Sensex.
Sterling Tools’ revenue profile is well diversified, covering all major automotive segments, as well as some non-automotive segments.