June 03, 2014
Mumbai
Forbes Marshall Private Limited
 
Rated amount enhanced
 
Total Bank Loan Facilities Rated Rs.2350 Million (Enhanced from Rs.760 Million)
Long Term Rating CRISIL A+/Stable (Reaffirmed)
Short Term Rating CRISIL A1+ (Reaffirmed)
(Refer to Annexure 1 for Facility-wise details)

CRISIL's ratings on the bank facilities of Forbes Marshall Pvt Ltd (FMPL; part of the Forbes Marshall group) continue to reflect Forbes Marshall group's established position in the steam engineering and control instrumentation segment supported by its strong technical capabilities and marketing set-up, and its healthy financial risk profile marked by adequate net worth, and comfortable debt protection metrics. These rating strengths are partially offset by the working capital intensive nature of Forbes Marshall group's operations and susceptibility of its profitability to adverse product mix and competition in the industry.

For arriving at the ratings, CRISIL has combined the business and financial risk profiles of FMPL, Forbes Marshall Arca Pvt Ltd, Krohne Marshall Pvt Ltd, JN Marshall Pvt Ltd, Spirax Marshall Pvt Ltd, Forbes Marshall Vyncke Pvt Ltd, Forbes Marshall Codel Pvt Ltd, Forbes Marshall (Hyd) Pvt Ltd, Forbes Marshall Lanka Pvt Ltd, and Forbes Marshall Canada Inc, together referred to as the Forbes Marshall group on account of operational synergies and inter-party transactions; furthermore, all the companies are in the same line of business and have a common management and clientele. Also, FMPL has extended corporate guarantees for the debt contracted by some of its group entities.

Outlook: Stable

CRISIL believes that the Forbes Marshall group will maintain its credit risk profile over the medium term supported by its established market position, healthy capital structure and comfortable debt protection measures. The outlook maybe revised to 'Positive' if the group exhibits substantial increase in accruals backed by significant growth in revenue and profitability. Conversely, the outlook maybe revised to 'Negative' if the group undertakes additional large debt-funded capital expenditures (capex) such that it weakens the financial risk profile or if the liquidity profile of the group deteriorates due to unexpectedly large working capital requirements or if there is a steep decline in the group's profitability.

About the Forbes Marshall Group
The Forbes Marshall group has been in the steam engineering and control instrumentation segment for more than five decades. The group's products find application in diverse sectors, such as power, cement, metals and mining, fertilisers, pharmaceuticals, and oil and gas. The group has its manufacturing facilities in Kasarwadi and Pimpri, near Pune (Maharashtra). The group has formed many technological tie-ups under separate JVs with large global players, such as Spirax Sarco (UK), Krohne Messtechnik GmbH (Germany), Arca Regler(Germany), Vyncke (Belgium) and Codel International (UK) at various stages of the steam processing value chain.

About FMPL
FMPL, a part of the 60 -year-old Forbes Marshall group of companies, was promoted by Mr. Darius Forbes in 1985. FMPL manufactures piston valves, stop and safety valves, controllers, instrumentation systems, vibration monitoring systems, steam and water analysis products and systems and boiler systems, etc. The company also derives income by way of commission by acting as an indenting agent for special purpose equipment related to process efficiency, such as Shinkawa, Japan vibration monitors and sensors, Codel International Limited, UK emission monitoring units and Hack Lange sarl, France's analysers. The company is undertaking capital expenditure program towards expansion of facilities at Chakan near Pune. The company is currently undertaking capital expenditure towards expansion of storage, machining and assembly capacities at Chakan near Pune at a cost of Rs. 1.7 billion which will help the company improve operating efficiencies.

FMPL reported net sales of Rs. 3.43 billion for 2012-13 (refers to financial year, April 1 to March 31), against net sales of Rs.2.92 billion for 2011-12.

Annexure 1 - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Million) Rating Facility Amount (Rs.Million) Rating
Bank Guarantee 500 CRISIL A1+ Bank Guarantee 250 CRISIL A1+
Cash Credit 550 CRISIL A+/Stable Cash Credit 460 CRISIL A+/Stable
Letter of Credit 100 CRISIL A1+ Letter of Credit 30 CRISIL A1+
Letter of credit & Bank Guarantee 100 CRISIL A1+ Letter of credit & Bank Guarantee 20 CRISIL A1+
Term Loan 1100 CRISIL A+/Stable -- 0 --
Total 2350 -- Total 760 --
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June 03, 2014

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