CRISIL has upgraded its rating on the long-term bank facilities of VXL Instruments (VXL) to 'B/Stable' from 'B-/Stable'; the rating on the company's short-term bank facility has been reaffirmed at 'A4'.

The rating upgrade reflects VXL's improved financial risk profile, driven by healthy cash proceeds from its asset disposals during October 2013. The company's net worth and gearing are estimated to improve to Rs.180 million and below 1.0 times, respectively, as on Mar. 31, 2014, from Rs.93 million and 1.66 times, respectively, as on Mar. 31, 2013.

Furthermore, VXL's liquidity has improved significantly with non-utilisation of its working capital limits during the four months through Jan. 2014, and an increase in its cash and bank balances to Rs 34 million as on Dec. 31, 2013 from Rs.17 million as on Sept. 31, 2013. CRISIL believes that VXL will maintain its improved financial risk profile and liquidity, in the absence of any substantial capital expenditure (capex) plans over the medium term.

CRISIL believes that VXL will continue to benefit over the medium term from its established relationships with key clients. The outlook may be revised to 'Positive' if VXL improves its cash accruals, because of sizeable revenue and profitability, and maintains its capital structure. Conversely, the outlook may be revised to 'Negative' if VXL's liquidity is constrained by low cash accruals, large working capital requirements, or debt-funded capex.

Shares of the company gained Rs 0.4, or 3.45%, to settle at Rs 12. The total volume of shares traded was 3,600 at the BSE (Friday).