CRISIL has assigned its 'AA+/Stable' rating to the non-convertible debentures of Petronet LNG. The rating reflects Petronet's strong business risk profile marked by its dominant market position in the Re-gasified Liquified Natural Gas (RLNG) business and superior operating efficiencies on account of continued high capacity utilisations, stability in operating profits and lower capital cost.

The rating is also supported by healthy financial risk profile as reflected in its strong financial position and high financial flexibility. These rating strengths are partially offset by the susceptibility of its profitability to ramp-up risk at Kochi terminal and execution risk at Gangavaram, a project in the concept stage.

CRISIL believes that Petronet will continue to benefit from its water tight take or pay agreements over the medium term. The outlook may be revised to 'Positive' post stabilization of incremental capacities at Dahej and Kochi leading to alleviation of project risks, substantial improvement in company's operating profits and thereby its debt protection metrics. Conversely, the outlook may be revised to 'Negative' in case of change in existing contractual or tolling structure or unexpected/larger than expected debt-funded capital expenditure/acquisition or unrelated diversification.

Shares of the company declined Rs 5.85, or 3.18%, to settle at Rs 178.10. The total volume of shares traded was 86,033 at the BSE (Friday).