CRISIL has assigned its bank loan ratings of ‘A-/Stable/P2+’ to the various bank facilities of Astral Poly Technik Ltd (APL). The ratings reflect APL’s leadership position in niche, chlorinated poly vinyl chloride (CPVC) pipes and fittings segment and comfortable financial risk profile. These strengths are partly offset by APL’s exposure to risks relating to increasing competition, single-supplier concentration, and the real estate sector, and the working capital intensive nature of the company’s operations.

Outlook: Stable
CRISIL expects APL to maintain its established position in the niche CPVC segment and benefit from its proposed product launches and ongoing capacity expansion. Also, CRISIL expects the company to maintain its gearing at a comfortable level. The outlook may be revised to ‘Positive’ upon consolidation of the size of company’s operations and product range while maintaining comfortable operating margins and capital structure. Conversely, the outlook may be revised to ‘Negative’ in case of significant deterioration in the company’s operating margins due to higher-than-envisaged competition, or large debt-funded expansions beyond present expectations leading to weakening of the company’s capital structure.

About APL:
APL, established in 1996 by Mr. Sandeep Engineer, manufactures and trades in CPVC and lead-free poly vinyl chloride (PVC) plumbing systems for residential, commercial and industrial applications. APL has a licensing agreement with Lubrizol Corporation to manufacture products under the FlowGuard brand. In 1998, APL entered into a techno-financial joint venture with Specialty Process LLC (Specialty), USA, for technical expertise in manufacturing CPVC pipes and fittings, and part-funding of its expansion plans. Speciality holds 14.1 per cent stake in APL. For 2007-08, APL reported a profit after tax (PAT) of Rs.170.69 million on net sales of Rs.1358.15 million, as against a PAT of Rs.91.10 million on net sales of Rs.969.18 million for 2006-07.