S&P keeps DIAL's B-minus ratings on credit watch negative
Jan 29, 2021
Singapore, January 29 : S&P Global Ratings on Friday kept Delhi International Airport Ltd's (DIAL's) B-minus ratings on credit watch negative but said the control period three (CP3) tariff implementation will not materially strain its cash flows and interest servicing ability.
"We forecast the company's funds from operations cash interest coverage will remain at about 0.8x over fiscals 2022 (ending March 31, 2022) and 2023," said S&P.
The final tariff order announced by the regulator on December 30, 2020 allows DIAL to continue with current base airport charges plus 10 per cent. This is lower than our previous expectation of a tariff that is 40 per cent higher than the current base airport charges levels.
However, DIAL will be able to earn additional compensation tariff toward discontinuance of fuel throughput charges (to be levied from February 1, 2021) which will partly offset the lower tariff increase.
S&P estimated DIAL's EBITDA will be about Rs 790 crore in fiscal 2022 and Rs 960 crore in fiscal 2023 which is about Rs 70 crore a year lower than its previous expectations.
DIAL continues to face refinancing risks over the next 12 months, though there is some progress, it added. S&P also said the company can manage its liquidity needs over the next 12 months.
