CRISIL has reaffirmed its ratings of ‘BBB/Stable/P3+’ to the bank facilities of Ascent Circuits Pvt Ltd (Ascent). The ratings continue to reflect the benefits that Ascent derives from its established presence in the printed circuit board (PCB) market, its experienced promoters, and its prudent operational and financing policies. These strengths are partially offset by the company’s exposure to risks relating to intense competition and cyclicality in the PCB industry.

Outlook: Stable
CRISIL believes that Ascent will maintain a stable business risk profile, backed by established relationships with reputed customers, expected growth in the key user sectors like automobile, telecommunication, power, electronics and microwave and RF(Radio Frequency), and improvement in operational efficiency. The outlook may be revised to ‘Positive’ if there is sustained improvement in Ascent’s revenues and profitability; or to ‘Negative’ if the company’s business risk profile deteriorates, following decline in off take or profitability, or sharp decline in the debt protection indicators or if increase in debt constrains the company’s financial risk profile.

Update
Ascent has witnessed improvement in its margins during year 2009 - 10 due to tilt in the revenue mix towards ‘multilayered’ PCBs which fetch higher margins as compared to single sided and double sided PCBs. During the year, company has been able to maintain adequate liquidity on the back of improved accruals and support from promoters in form of unsecured non - interest bearing loans of Rs. 54 million. Company’s bank limit utilization averaged around 82per cent. for half year ended on March 31, 2010 (refers to period beginning September 1, 2009 to March 31)Ascent shall be incurring a capex of ~ Rs.22 million during year 2010 - 11 to install an effluent treatment plant out of its internal accruals.

Ascent’s (provisional figures) profit after tax (PAT) was Rs.59 million on sales of Rs.713 million for 2009-10 (refers to financial year, April 1 to March 31), as against a PAT of Rs.27 million on net sales of Rs.625 million for 2008-09.

About the Company
Ascent has been promoted by Mr P Manjunath, Mr G Shankar Ram, and Mr A Arvind Rao, who took it over in 1999 from Rao Insulating Co Ltd. The promoters have turned the company around within a year. Ascent manufactures double-, and single-sided, and multi-layered PCBs. The company, headquartered in Bangalore, is the fourth largest manufacturer of PCBs in India. Its facility at Hosur has capacity to produce more than 0.5 million square meters (MSM) of single-sided and 0.12 MSM of double-sided/multi-layered PCBs.