Fitch affirms Mudra Lifestyle

Fitch Ratings said it affirmed Mudra Lifestyle Ltd.'s national long-term rating at BBB(ind), along with its Rs. 2.12 billion long-term loan and its Rs. 1.28 billion cash credit limits at BBB(ind) and Rs. 360 million short-term loan at F3(ind). The agency also said it assigned an F3(ind) rating to its Rs. 400 million non-fund based facilities.

The outlook remains negative.

The negative outlook reflects the company's ongoing capital expenditure and the refinancing risk in the short to medium-term, Fitch said.

The outlook also factors in the expected delay in deleveraging beyond 2011, the agency said.

Furthermore, higher receivables and inventory pile-ups will continue to result in increased liquidity pressures, though operating margins during the last three quarters ended December 2009 have improved due to the overall sector recovery and the addition of high value added products.

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