Moody's assigns medium grate rating to L&T

NEW DELHI: Global rating agency Moody's on Thursday assigned a medium grade rating to engineering firm Larsen and Toubro with a stable outlook, on the basis of its strong financial profile and liquidity position.
   
"The 'Baa2' reflects L&T's position as one of India's leading E&C companies as well as its status as one of Asia's largest vertically integrated E&C conglomerates," Moody's assistant vice president Peter Fullerton said.
    
The 'Baa2' is a medium grade rating and reflects moderate credit risk.
    
Moody's said the underlined constraints in the rating are capital expansion programme resulting in rising debt levels.
    
"The Baa2 rating further reflects event and execution risk as the company expands outside India and domestically for its E&C and other businesses," Fullerton said.
   
The ratings could go higher if L&T continues to build a successful track record for expansion plans in domestic as well as overseas markets. However, on account of losses in E&C and increased debt volume the company would notice a downward trend in its rating, the agency said.