CRISIL has assigned its ‘BBB/Stable/P3+’ ratings to Aarya Industrial Products Pvt Ltd’s (Aarya Industrial’s) bank facilities. The ratings reflect Aarya Industrial’s healthy financial risk profile, marked by low gearing, strong debt protection metrics, and stable operating income and cash accruals, and the benefits that the company derives from established relationships with its suppliers and customers. These rating strengths are partially offset by Aarya Industrial’s exposure to risks associated with the trading nature of its business, and to cyclicality in the steel industry.

Outlook: Stable
CRISIL believes that Aarya Industrial will continue to benefit from its promoters’ experience in the steel industry and established relationships with its customers and suppliers. The outlook may be revised to ‘Positive’ if Aarya Industrial reports substantial growth in scale of operations and profitability, leading to larger-than-expected cash accruals. Conversely, the outlook may be revised to ‘Negative’ if there is significant pressure on revenues and profitability, leading to deterioration in the company’s financial risk profile.

About the Company
Set up in 1999 by Mr. Alok Agarwaol as a closely-held company, Aarya Industrial trades in minerals and bulk solvents. It also has warehousing units in Kolkata, Mumbai, Delhi, Chennai and Ahmedabad. The company trades in methanol, acetic acid, isopropyl alcohol, and calcium carbonate, which are used in industries such as steel, pipes, and aluminium.

Aarya Industrial reported a profit after tax (PAT) of Rs.8.2 million on net sales of Rs.924 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of Rs.5.8 million on net sales of Rs.649 million for 2007-08.