P1 plus for TI Diamond Chain again

The P1 plus rating assigned to the Rs. 10 crore commercial paper programme of TI Diamond Chain (TIDC) has been reaffirmed. The rating factors in the company's strong market position in the domestic duopoly chain industry, stable growth prospects of the industry, favourable financial profile of the company, and support of the Murugappa group companies. The rating is, however, constrained by the relatively small net worth and volatility in turnover on account of fluctuating export performance.

TIDC is engaged in the manufacture and sale of automotive and industrial chains. The company enjoys a strong market position in the domestic chains industry as one of the duopoly players in both automotive and industrial chain segments. TIDC supplies automotive chains to large two-wheeler manufacturers such as Hero Honda, TVS Suzuki and Kawasaki Bajaj, and has a fairly large dealer network catering to the replacement market.

In the industrial chains business, the company supplies to a variety of applications such as pumps, cement, mining, oil refinery, textiles, material handling and agriculture. Established relationship of the existing players with the OEMs for automotive chains, high degree of customisation required in industrial chains and small size of the domestic market result in high entry barriers for new entrants.

However, there is a threat of entry of foreign players, with their global supplier relationships with two-wheeler manufacturers, in the standardised chains market. Supporting the company's strong market shares are its manufacturing strengths reflected by its internationally accredited plants, further complemented by the tie-ups with leading global players such as Amstead Inc and Tsubakimoto of Japan.

- Corporate Bureau

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Section  : Business
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