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CRISIL has assigned its ‘BBB+/Stable/P2’ ratings to the bank facilities of Gillanders Arbuthnot & Co. Ltd (GACL). The ratings reflect GACL’s stable financial risk profile because of strong steady accruals, and its established presence in diverse industries. These rating strengths are partially offset by GACL’s limited pricing power and susceptibility to intense competition in its key businesses like textiles, chemicals and tea.
Outlook: Stable
CRISIL believes that GACL will continue to benefit from its established market presence, particularly in the yarn (textile and manmade yarn), engineering, and tea sectors, and will maintain a stable financial risk profile, backed by steady accruals from its trading, chemicals, and property leasing businesses over the medium term. The outlook may be revised to ‘Positive’ if the company’s profitability improves significantly because of significant and sustained increase in cash accruals. Conversely, the outlook may be revised to ‘Negative’ if GACL’s profitability reduces considerably, thereby adversely affecting its debt protection indicators.
About the Company
Incorporated in 1935, GACL is a multidivisional entity engaged in diverse businesses such as textile, engineering, tea, chemicals, trading, and leasing of property. The Kolkata-based company is part of the GD Kothari group of companies, which has business interests in plantations, textiles, pharmaceuticals, healthcare, engineering, real estate, and other industries/services. Over the years, GACL has remained a multi-divisional entity, entering and exiting various businesses.
GACL reported a profit after tax (PAT) of Rs. 165.6 million on net sales of Rs.4373.5 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of Rs.156.5 million on net sales of Rs.3812 million for 2007-08.
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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 generally available without charge to the public on the CRISIL public 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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