CRISIL has enhanced the rated amount while reaffirming 'A-/Stable/A2+' ratings on the bank facilities of Sterling Tools (STL). The ratings continue to reflect STL's established market position in the high-tensile fastener manufacturing segment along with a well-diversified customer base. The rated amount enhanced to Rs 1.38 billion from Rs 1.26 billion for the bank facilities.

The ratings are also supported by the company's healthy financial risk profile, marked by healthy debt protection metrics. These rating strengths are partially offset by STPL's exposure to intense industry competition and the susceptibility of its profitability margins to volatility in raw material prices.

CRISIL believes that STL will continue to benefit over the medium term from its diversified product portfolio and its promoters' extensive industry experience; the company will also maintain its healthy financial risk profile over this period, supported by healthy net worth. The outlook may be revised to 'Positive' in case of a significant increase in STL's revenue or profitability, resulting in an improvement in its business risk profile, while it maintains its healthy financial risk profile.

Conversely, the outlook may be revised to 'Negative' if the company's revenue or profitability declines significantly, or if it undertakes a substantial debt-funded capital expenditure programme or makes large dividend payouts, adversely impacting its financial risk profile.

Shares of the company gained Rs 0.5, or 0.14%, to trade at Rs 347.60. The total volume of shares traded was 167 at the BSE (11.45 a.m., Tuesday).