CRISIL has assigned its ‘B+/Stable’ rating to the bank facilities of Mohak Carpets & Flooring Pvt Ltd (MCFPL). The rating reflects MCFPL’s limited financial flexibility because of high gearing, and exposure to demand risks, given that the company does not have an established marketing and distribution network. These rating weaknesses are partially offset by MCFPL’s promoters’ experience in the carpet manufacturing business.

Outlook: Stable
CRISIL believes that MCFPL will stabilise its manufacturing operations over the medium term, supported by promoters’ industry experience of more than two and a half decades. The outlook may be revised to ‘Positive’ if MCFPL’s capital structure improves, driven most likely by larger-than-expected cash accruals because of more-than-expected capacity utilisation and sales. Conversely, the outlook may be revised to ‘Negative’ if MCFPL delays in stabilising its manufacturing operations or weakens its debt servicing ability by undertaking larger-than-expected debt-funded capital expenditure programme.

About the Company
MCFPL was incorporated in August 2009. It is promoted by Mr. Surinder Bajaj and his wife Mrs. Minal Bajaj. The company is into manufacturing non-woven and tufted carpets. Its manufacturing plant is currently coming up at Greater Noida (Uttar Pradesh); commercial operations at the plant are expected to commence by October 2010. The plant will have an annual production capacity of 4320 tonnes of non-woven carpet and 0.72 million metres of tufted carpet on three-shift basis.