CRISIL has mentioned some details about the fire incident in their latest report:
CRISIL Ratings has noted the announcement by ARBL on January 31, 2023, regarding the fire on the night of January 30, 2023, at its tubular battery plant at Nungundapalli in Chittoor, Andhra Pradesh. The plant, which caters to the home inverter battery segment (revenue of ~Rs 700 crore in fiscal 2022) was completely gutted in the fire caused by a short circuit.
Revenue from tubular batteries will be impacted in fiscal 2023 and for a significant part of fiscal 2024, though the company will look to mitigate the impact through sale of finished goods inventory and by stepping up trading in tubular batteries. Nevertheless, revenue growth in other automotive and industrial battery segments continues to be strong.
CRISIL Ratings believes the damage at the tubular battery plant will not have a major impact on the credit risk profile of ARBL, due to strong contribution from other segments and still healthy operating profitability, and cash generation. Besides, the company had taken a comprehensive insurance cover to cover the loss of assets, inventory including loss of profit.
With respect to the ongoing legal case pertaining to orders from the Andhra Pradesh Pollution Control Board (APPCB) for closure of the company’s plants at Chittoor and Tirupati, the Hon’ble High Court of Andhra Pradesh, vide its latest order dated January 19, 2023, has extended the interim suspension of plant closure orders until further orders without mentioning any date.
Disclosure: No investment.
| Subscribe To Our Free Newsletter |
