Fitch upgrades AD Hydro Power view to stable

Fitch Ratings said it revised the outlook on AD Hydro Power Ltd.'s national long-term rating to stable from negative, and affirmed the rating at BBB(ind).

The agency also said it affirmed its sanctioned Rs. 9.97 billion long-term bank loans at BBB(ind).

The outlook revision reflects the partial commencement of commercial operations of the company's hydro electric project in Kullu, despite prolonged geological challenges encountered in the construction, Fitch said.

The outlook revision further considers an expectation of a limited likelihood of incremental cost overruns from here on, the agency said.

The company's ratings are based on the accretion of cash flows from the project by way of short-term power arrangements through the power trader, PTC India Ltd., Fitch said. But, the agency noted that weakening of merchant power prices could negatively impact the company's revenues and profitability over the short- to medium-term.

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