CRISIL has assigned its ‘BB+/Stable/P4+’ ratings to the bank facilities of Metalogic Systems Pvt Ltd (MSPL). The ratings reflects MSPL’s small scale of operations and exposure to revenue concentration risks. These rating weaknesses are partially offset by the benefits that MSPL derives from its established market position in the legacy application transformation and software automation business domain, and its healthy financial risk profile.

Outlook: Stable
CRISIL believes that MSPL will continue to benefit from its established position in the niche legacy application transformation domain and its established alliances with large information technology (IT) system integration companies. The outlook may be revised to ‘Positive’ if there is significant and sustained improvement in MSPL’s profitability and revenues, or improvement in its receivables collection. Conversely, the outlook may be revised to ‘Negative’ if MSPL contracts larger-than-expected debt to fund its capital expenditure, or if it reports lower-than-expected increase in operating income and profits, or in case of further deterioration in its receivables level.

About the Company
Incorporated in July 1997, the Kolkata-based MSPL has been providing software services over the past 12 years. The company’s promoters, Mr. Arup Dasgupta and Mr. Ansuman Bhattacharya, have over two decades of experience in similar lines of business. MSPL has an established market position in the niche legacy application modernisation, software application migration, and software automation domain. MSPL is an ISO 9001:2000 certified company. It also has ISO 27001:2005 (BS 7799) certification for information security management systems.

MSPL reported a profit after tax (PAT) of Rs.4.70 million on net sales of Rs.74.60 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of Rs.17.80 million on net sales of Rs.72.10 million for 2007-08.