Fitch: IVRCL outlook negative

Fitch Ratings said it affirmed IVRCL Ltd.'s national long-term rating and Rs. 3.2 billion debenture program at Fitch A+(ind) but downgraded its short-term facilities and commercial paper program to Fitch A1(ind) from Fitch A1+(ind). The ratings have been removed from Rating Watch negative, and the outlook is negative.

Fitch said the negative outlook and the downgrade reflect uncertainty as to whether the company's net leverage will continue to deteriorate beyond the financial year that ended in March. A decrease in revenue is expected to weaken net leverage above 5.75 times in 2012 from 5.08 times in 2011 and 3.68 times in 2010, the agency said.

Although revenue fell in the first nine months of fiscal 2012, Fitch noted that IVRCL's order book remains strong at Rs. 251 billion. If the company improves its order book execution, as the agency expects it to, revenue may recover substantially to about Rs. 65 billion in fiscal 2013.

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