Fitch rates Emgee Cables

Fitch Ratings said it assigned Emgee Cables and Communications Ltd. a national long-term rating of BB+(ind).

The outlook is stable.

The ratings are constrained by Emgee's tight liquidity position as reflected in over 95% utilization of its working capital limits in fiscal 2011 ended March, according to the agency.

This is largely on account of its weak cash accruals due to high working capital intensity.

The ratings also factor in Emgee's relatively small size of operations, coupled with the high competition in the industry, the agency said.

Emgee had a net debt-to-EBITDAR ratio of 3.7x in fiscal 2011.

The ratings are supported by Emgee's track record of more than two decades in cable manufacturing and revenue growth, as well as its strong product portfolio and distribution network, especially in North India, Fitch noted.

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