India Ratings and Research (Ind-Ra) has upgraded Omax Autos long-term issuer rating to 'A-' from 'BBB+'. The outlook is stable.

The upgrade reflects the improvement in Omax's credit metrics in FY16 driven by an improvement in revenue and profitability and a reduction in debt. Financial leverage (net debt/EBITDA) reduced further to 1.4x in FY16 (FY15: 2.3x; FY14: 3.5x), which was a positive rating sensitivity, while gross interest coverage kept on increasing to 3.7x (2.5x; 1.7x).

Ind-Ra expects the credit metrics to continue to show improvements in FY17 and beyond due to further deleveraging as a result of improving cash accruals.

Shares of the company gained Rs 2.1, or 3.54%, to settle at Rs 61.45. The total volume of shares traded was 8,648 at the BSE (Wednesday).