The rating agency has also withdrawn its ratings on the Rs 225 crore non-convertible debentures as these have been redeemed.
PVR share price gained nearly 4 percent intraday on February 3 after rating upgrade by CRISIL.
CRISIL has upgraded its rating on the non-convertible debentures and long-term bank facilities of the company to CRISIL AA/Stable from CRISIL AA-/Stable.
The rating agency has also withdrawn its ratings on the Rs 225 crore non-convertible debentures as these have been redeemed. The withdrawal is in-line with CRISIL's withdrawal policy.
The rating upgrade is driven by CRISIL's expectation of a sustained improvement in PVR's business risk profile leading to strong cash flows. Also, supported by qualified institutional placement (QIP) of Rs 500 crore in October 2019 along with healthy cash accruals, company's financial risk profile has seen a shift with debt to EBITDA ratio expected to sustain below 1.5 times for fiscal 2020, said company in release.
Operating metrics have improved significantly, which should lead to return on capital employed (RoCE) ratio sustaining above 16%, while cash accruals are likely to remain sufficient to fund the planned 80-100 screen addition.
The rating continues to reflect PVR's strong market position and established brand, healthy operating efficiency, and a significantly improved financial risk profile. These strengths are partially offset by exposure to risks inherent in the film exhibition business, it added.
At 13:58 hrs PVR was quoting at Rs 1,970.80, up Rs 53.40, or 2.79 percent on the BSE.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
