ICRA has revised the long term rating assigned to the Rs. 1,060.48 crore term loans, Rs. 337.91 crore fund based limits, Rs. 110.0 crore non-fund based limits and Rs. 375 crore NCD program of Prism Cement Limited (PCL) from [ICRA]A+ (pronounced as ICRA A plus) to [ICRA]A (pronounced as ICRA A). The outlook on the long term rating is ‗Stable‘. ICRA has reaffirmed the short term rating assigned to the Rs. 50 crore short term loans, Rs. 40.0 crore fund based limits and Rs. 292.0 crore non-fund based limits of the company at [ICRA] A1 (pronounced as ICRA A one). The revision of the long term rating factors in strain on Prism Cement‘s financial profile on back of weakening business environment and cost-pressures in the company‘s TBK division. The cement division also remains exposed to capacity additions in the nearby region, which may lead to surplus capacities impacting realizations and profitability indicators, especially since power & fuel cost (on account of rising coal cost) have been on an upward trend for the company. In addition to the cement division, the company‘s profitability indicators in the TBK division have also been witnessing margin pressures as intense competition continues to restrict pricing flexibility. Further escalation of fuel costs - with the unavailability of adequate natural gas and RLNG leading to usage of costlier LPG is likely to impact the margins of the TBK division. The company has replacement capex lined up in both cement and TBK divisions over the near to medium term and greenfield capex over the medium to long term. ICRA notes that the company may defer its greenfield projects in a scenario where weakness in business environment may strain cash flow generation from existing operations. The company has significant debt repayments in the near to medium term. Adequate internal cash generation would remain crucial to mitigate any pressures on liquidity arising on account of repayment of these debts. The ratings also factor in the vulnerability of profit margins to foreign currency fluctuations. The ratings continue to derive comfort from the established presence of the company as a cement manufacturer in the central region, proximity of the cement plant to limestone reserves, expected benefits to cost structure post commissioning of the coal block, the company‘s leadership position in the domestic tiles industry, its strong presence of the RMC division in the western and southern markets and benefits arising due to the backward integration of the RMC division into the aggregate business. The diversified revenue mix of the company mitigates demand fluctuation in any particular business to some extent.