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CRISIL ratings on the bank facilities of Roto Pumps Ltd (RPL) continues to reflect RPL’s healthy financial risk profile, marked by moderate gearing and healthy debt-protection metrics, and healthy operating margin, resulting from its established position in a value-added segment. These rating strengths are partially offset by RPL’s small scale of operations.
Outlook: Stable
CRISIL believes that RPL will maintain its healthy operating margin over the medium term, backed by its dominant position in the niche high-value industrial pumps segment and its increasing thrust on export sales. The outlook may be revised to ‘Positive’ in case of a significant improvement in RPL’s revenue growth and operating margin. Conversely, the outlook may be revised to ‘Negative’ if RPL undertakes a larger-than-expected debt-funded capital expenditure programme or reports a decline in its net cash accruals.
About the company
RPL manufactures two varieties of industrial pumps: progressive cavity pumps and twin-screw pumps. RPL- manufactured pumps are specialised and custom-made, and used in industries where the fluid viscosity is high. These pumps are also used in waste water treatment, oil and gas, marine, and sugar industries. RPL is listed on the Bombay Stock Exchange and is based in Noida (Uttar Pradesh). The share of export sales in the overall sales was about 56 percent in 2010-11. RPL has two overseas branches located at Melbourne, Australia and Manchester, United Kingdom each.
RPL reported a profit after tax (PAT) of Rs.53.8 million on net sales of Rs.588.8million for 2010-11 (refers to financial year, April 1 to March 31), as against a PAT of Rs.41.5 million on net sales of Rs.494.2 million for 2009-10.
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Analytical Contacts
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CRISIL Rating Desk
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Mitu Samar
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Tanuja Abhinandan
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Gurpreet S Chhatwal
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Mohit Makhija
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About CRISIL Limited
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Last updated: March 31, 2011
Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. CRISIL Ratings’ rating criteria are available without charge to the public on the CRISIL web site, www.crisil.com. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 3342 3000.
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