India Ratings and Research (Ind-Ra) has upgraded CEAT long-term issuer rating to 'AA-' from ' A+'. The outlook is stable.

The upgrade reflects the moderate improvement in CEAT's financial performance in FY15 and Ind-Ra's expectation of further strengthening of the company’s business and overall credit profiles over FY16-FY18.

Ind-Ra believes that the strengthening of the business profile through capacity augmentation in segments more profitable than the truck and bus tyre segment (its single largest product segment) will more than offset the increase in leverage in FY16 and FY17 due to additional debt drawdowns for funding capex plans. Ind-Ra has taken a consolidated view of CEAT and its JVs.

Shares of the company declined Rs 27.45, or 2.33%, to trade at Rs 1,150.30. The total volume of shares traded was 59,292 at the BSE (3.14 p.m., Wednesday).