Credit Rating Assignment
Larsen & Toubro Secures Moody’s Baa1 Rating with Stable Outlook
NSE
LT
BSE
500510
Larsen & Toubro Limited (L&T) has announced that Moody’s Ratings has assigned a ‘Baa1’ Long-Term Issuer Rating with a Stable Outlook to the company. Moody’s has also assigned the same Baa1/Stable rating to Hydrocarbon Saudi Company LLC, L&T’s wholly owned subsidiary.
PRICE-SENSITIVE TRIGGER
Event: Moody’s assigned a Baa1 long-term issuer rating with a Stable Outlook to L&T and its wholly owned subsidiary.
Type: Credit Rating Assignment
Impact: Positive
Immediate Effect: Strengthens L&T’s global credit profile with an investment-grade Moody’s Baa1 rating and Stable Outlook.
highlight:
- Issuer Rating: Moody’s Baa1
- Outlook: Stable
What Happened ?
Larsen & Toubro Limited informed the stock exchanges that Moody’s Ratings has assigned the company a Baa1 Long-Term Issuer Rating with a Stable Outlook.
Moody’s also assigned the same Baa1/Stable rating to Hydrocarbon Saudi Company LLC, L&T’s wholly owned subsidiary. According to the company, the rating is two notches above India’s sovereign rating of Baa3, reflecting L&T’s strong credit profile, prudent financial management, and diversified business operations.
Key Details
Operational Highlights:
- Moody’s assigned Baa1 Long-Term Issuer Rating to Larsen & Toubro.
- The rating carries a Stable Outlook.
- Hydrocarbon Saudi Company LLC, L&T’s wholly owned subsidiary, also received a Baa1/Stable rating.
- Moody’s cited L&T’s diversified business model, financial resilience and operational strength.
- The agency highlighted disciplined financial management, healthy operating margins and comfortable leverage.
- The rating is two notches above India’s sovereign rating (Baa3).
- Moody’s also noted the strategic importance of L&T’s West Asia operations through its Saudi subsidiary.
Note:
- The filing represents a new international issuer rating assignment and does not involve fundraising, debt issuance or any change in the company’s capital structure.
Risk Analysis
Summary:
- The investment-grade rating reinforces L&T’s credit standing. Future rating actions will depend on maintaining financial discipline, profitability and leverage metrics.
Key Risks:
- Future ratings remain subject to periodic review by Moody’s.
- Any deterioration in leverage or cash flow could affect future ratings.
- Global macroeconomic and infrastructure market conditions may influence future credit assessments.
- Execution risks on large EPC projects could impact operating performance.
Worst Case:
- A future downgrade could increase borrowing costs and reduce financing flexibility in international debt markets.
Risk Level: Low
Company Commentary
- Moody’s assigned Baa1 Long-Term Issuer Rating with a Stable Outlook to L&T.
- The same rating has been assigned to Hydrocarbon Saudi Company LLC.
- Management stated the rating reinforces the group’s robust credit profile and financial resilience.
- Moody’s highlighted L&T’s diversified operations, prudent financial management and strong execution capabilities.
- The company noted that the rating is two notches above India’s sovereign rating, placing L&T among a select group of Indian corporates.
Official Exchange Filing: Larsen & Toubro Limited
