CRISIL has downgraded its ratings on the debt instruments and bank facilities of NCC to 'BB+/Negative/ A4+' from 'BBB/Negative/A3+'.

The ratings downgrade reflect CRISIL's belief that the NCC group's continued high debt levels, combined with pressure on its profitability, will constrain the group's financial risk profile further over the medium term. CRISIL had earlier expected the group to reduce its debt by raising funds through divestments of its non-core assets, infusion of equity capital, and freeing up of some working capital over the medium term. In the current depressed business scenario, continued adverse investor sentiments, and challenging macro-economic environment, CRISIL now believes that the debt reduction will take longer than earlier expectations and group's debt protection metrics will further deteriorate over the medium term.

CRISIL believes that the NCC group's financial risk profile will continue to be under pressure over the medium term because of the group's stretched working capital cycle, high interest costs because of continued high debt levels, and the weak operating environment.

The ratings may be downgraded further if the NCC group takes longer-than-expected to reduce its debt levels, or if its operating performance is weaker than expected. Conversely, the outlook may be revised to 'Stable' if the group's short-term debt levels reduce significantly, or if there is a sustained improvement in its working capital cycle, thereby strengthening its overall credit risk profile.

Shares of the company gained Rs 2.1, or 7.34%, to trade at Rs 30.70. The total volume of shares traded was 403,157 at the BSE (3.22 p.m., Wednesday).