Credit Analysis & Research (CARE) reaffirmed 'BB-' ratings to GTN Textiles' long -term bank facilities of Rs 462.9 million (reduced from Rs 550.6 million). CARE reaffirmed 'A4' ratings to the company's short-term bank facilities of Rs 775 million (enhanced from Rs 710 million).

The ratings continue to be constrained by the weak financial risk profile of GTN Textiles (GTL) as evidenced by the high gearing levels consequent to reduction in the net-worth due to losses posted in FY12 and FY13 (refers to the period April 1 to March 31), low cash accruals and exposure to volatility in raw material prices. The ratings also factor in the moderation in the operating margins of the company in FY13. 

The ratings take into account the vast experience of the promoter in the textile industry, synergy of operations among the group companies, significant improvement in operational and financial performance in H1FY14 (refers to the period April 1 to September 30) and improvement in the industry scenario.

The ability of the company to improve its profitability and capital structure will be the key rating sensitivity.

Shares of the company declined Rs 0.11, or 1.69%, to settle at Rs 6.41. The total volume of shares traded was 14 at the BSE (Thursday).