The agency has also affirmed the company’s short-term rating at ‘CARE A1+’.
CARE Ratings stated that the ratings assigned to bank facilities of Trident continue to derive strength from its experienced management, diversified and integrated operations across textile and paper and chemicals segments, geographically diversified revenue stream and long and established customer relationships with large global retailers for its home textile business.
Ratings further factor its comfortable capital structure and debt coverage indicators, strong liquidity and fiscal incentives available for textile sector.
However, the long-term rating is tempered by moderation in the company’s operating profitability in FY24 (refers to April 01 to March 31) and 9MFY25. This is attributed to cotton yarn spreads and lower average sales realisation in the paper segment amidst oversupply and high raw material costs apart from slow ramp up of recently added capacities.
However, operating profitability is expected to improve from FY26 onwards as the new capacities ramp-up.
Ratings also factor Trident’s working capital intensive operations, profitability margins susceptible to cotton price volatility and foreign exchange rate movements and its presence in the inherently cyclical, fragmented and competitive textile and paper industries.
Trident is the flagship company of the Punjab-based Trident group. Trident is engaged in manufacturing cotton yarn, towel, bed sheet, paper and chemical products. Trident has three manufacturing facilities at Barnala, Punjab, and Budhni, Madhya Pradesh.
The scrip had fallen 2.28% to end at Rs 26.57 on the BSE on Friday.