ICRA, the rating agency, has downgraded Bengaluru Metropolitan Transport Corp (BMTC) to default due to delays and irregularities in long term loan by the state-owned public carrier.
In a statement ICRA said, “BMTC’s financial performance weak in FY2019, characterised by continued losses and the consequent strained liquidity position and inadequate coverage indicators. The stressed cash flows resulted in delays in debt servicing, despite the support received from the Government“.
This year June, BMTC fleet utilisation was around 86.7% as against 84.1% recorded last year. In recent times, gross revenue has seen only a marginal increase. As per BMTC, gross revenues stood at Rs530 crore as of June 2019 compared with Rs 2293 crore last year, while the cost of operations was at Rs618 crore during the period as against Rs 2,642 crore last year.
ICRA said that timely financial support and additions to its fleet will be ‘critical’ for improvement in its overall financial profile going forward.
Read EquityPandit’s Nifty Outlook for the Week