Credit Analysis & Research (CARE) has reaffirmed the 'BB' rating of Rs 6.68 billion long term bank facilities of Essar Shipping.

The rating takes into consideration deterioration in financial profile of the company as reflected by declining profitability, unfavorable industry scenario and weakening of credit profile of one of the major customers - Essar Steel India (ESIL).

All these factors have impacted the debt coverage indicators of ESL. The rating also takes into account high gearing level in the consolidated business and the inherently cyclical nature of shipping industry.

The ratings derive strength from ESL's experienced management, long track record of operations and its diversified presence across dry bulk and tanker segments.

ESL's ability to see through the industry wide slowdown by deploying its fleet in long term contracts at viable rates and improvement in performance of businesses undertaken by the subsidiaries are the key rating sensitivities.

Shares of the company gained Rs 0.08, or 0.54%, to settle at Rs 14.90. The total volume of shares traded was 4,490 at the BSE (Friday).