CRISIL has reaffirmed 'BBB+/Stable' ratings on the bank facilities of Hindustan Composites (HCL). The ratings continue to reflect its strong financial risk profile, marked by its large net worth, low gearing, and healthy debt protection metrics.

The ratings also factor in the company's strong investment portfolio and the promoters' extensive experience in the automobile (auto) components segment. These rating strengths are partially offset by HCL's modest scale of operations, and its susceptibility to volatility in raw material prices.

CRISIL believes that HCL will prudently manage its investment portfolio and maintain a high proportion of low risk instruments. Moreover, the company is unlikely to contract any debt for investments or its manufacturing operations.

The outlook may be revised to 'Positive' if HCL substantially scales up its operations and profitability in the auto component manufacturing segment. Conversely, the outlook may be revised to 'Negative' if the company realigns its asset allocation strategy to focus on high risk assets. Any deterioration in the profitability of HCL's auto components business; or substantial debt for its investment or manufacturing business, may also result in the outlook being revised to 'Negative', it said.