Fitch cuts T&T Motors

Fitch Ratings said it downgraded T & T Motors Ltd.'s national long-term rating to BB(ind) from BBB-(ind), along with its Rs. 377.5 million long-term debt to BB(ind) from BBB-(ind), Rs. 1.13 billion fund-based working capital limits to BB(ind)/F4(ind) from BBB-(ind)/F3(ind) and Rs. 25 million non-fund based working capital limits to BB(ind)/F4(ind) from BBB-(ind)/F3(ind).

The outlook is stable.

The downgrades reflect the significant increase in the company's financial leverage and the decline in its profitability margins due to higher selling and finance costs in 2010, Fitch said.

The ratings factor in its exclusivity agreement with Daimler AG for all its dealership locations, making it the largest dealer for Mercedes in India and contributing about 25% of its total sales across India, the agency said.

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