The ratings continue to reflect DSL's weak Vibram Five Fingers salefinancial risk profile marked by a high gearing and large working capital requirements. These weaknesses are partially offset by the company's improving business risk profile following increasing sales of value-added products, and the extensive industry experience ofVibram Five Fingers Kso its promoters.For arriving at its ratings, CRISIL has combined the business and financial risk profiles of DSL Vibram Five Fingers Bikila Grey-Yellowand DSL's German subsidiary Manz Fortuna GmbH, because both companies are in the same line of business, and there are significant operational and financial linkages between them.Outlook: NegativeCRISIL believes that the larger-than-expected debt contracted by DSL to fund its working capital requirements will continue to adversely impact the company's debt protection indicators over the medium termVibram Five Fingers Bikila Navy-Blue. The rating may be downgraded if DSL reports lower-than-anticipated sales and profitability, resulting in further deterioration in its debt protection indicators, or it undertakes a large debt-funded capital expenditure programme.
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