The ratings agency has affirmed its rating on the bonds of the cement maker, bearing a coupon rate of 10.4%, worth Rs 245 crore. The bonds were issued in December 2013 and are slated for maturity in December 2021.

India Ratings continues to factor in strong support from the company's ultimate parent, HeidelbergCement AG (HCAG, Fitch Ratings Issuer Default Ratings: 'BBB-'/Stable), while arriving at the rating, owing to the strong strategic, operational and legal linkages between the entities.

The ratings agency said that HCIL turned net cash positive at 9MFY20 end, primarily driven by a substantial reduction in debt. The debt reduction was driven by strong cash flow generation resulting from the improvement in EBITDA/tonne and efficient working capital management, coupled with lower capex given the low-cost debottlenecking being conducted by the company. In the absence of any major debt-led capex, stable profitability and cash flows, India Ratings expects HCIL's credit metrics to remain strong over the medium term.

The ratings agency further added that improvements in the linkages between HCIL and HCAG, or a rating upgrade of HCAG will be positive for HCIL's ratings. However, future developments that could, individually and collectively, lead to a negative rating action include a rating downgrade of HCAG and deterioration in the linkages between HCAG and HCIL, it concluded.

Heidelbergcement India is a subsidiary of HeidelbergCement AG, Germany. The company operates in central India in Damoh (Madhya Pradesh) and Jhansi (Uttar Pradesh) and in southern India in Ammasandra (Karnataka). Post the completion of the debottlenecking projects, HCIL will have effective capacity of 6.26 million tonnes per annum in Madhya Pradesh, Uttar Pradesh and Karnataka.

Shares of the cement maker ended at Rs 142.20 on Friday after they traded in the range of Rs 140.65 and Rs 152.60 during the day.