Lucas TVS

The outstanding P1 plus (P one plus) rating assigned to the commercial paper programme of Lucas TVS (LTVS) has been reaffirmed. The outstanding FAAA (F triple A) rating on the company's fixed deposit programme has been reaffirmed.

The above ratings take into account the proposed demerger of LTVS's fuel injection equipment (FIE) business and the associated impact on the company's financial risk profile.

The ratings are supported by its established and diverse presence in the Indian 4-wheeler auto electrical market, its strong brand name and ability to meet competition in the past in the domestic OEM and replacement markets, its proven ability to absorb and productionise new technology with respect to its range of products and a comfortable financial risk profile.

The ratings also take into account the large share of the OEM segment in the company's overall revenue streams, the potential pressure on profitability due to increased price pressure from domestic OEMs, competition from global players in the Indian market and the likely change in the capital structure as a result of the proposed demerger exercise.

LTVS is engaged in the manufacture and sale of auto electrical components and diesel fuel injection systems.

- Corporate Bureau

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