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CRISIL has assigned its ‘A+/Stable/P1’ ratings to the bank facilities of Puzzolana Machinery Fabricators (Puzzolana). The ratings reflect Puzzolana’s strong financial risk profile, marked by healthy cash accruals and negligible debt, and market leadership in the crusher-plant business. These rating strengths are partially offset by the firm’s exposure to risks relating to product concentration in revenue profile, cyclicality in the construction industry, and capital withdrawals by partners.
Outlook: Stable
CRISIL believes that Puzzolana will maintain its strong financial risk profile on the back of its negligible debt, and market leadership in the stone-crushing equipment business. The outlook may be revised to ‘Positive’ if the firm diversifies its product base and end-user profile, while maintaining its strong capital structure. Conversely, the outlook may be revised to ‘Negative’ if the partners make significant capital withdrawals, or if there is increase in the firm’s exposure to group companies, leading to increase in debt.
About the Firm
Set up in 1964 by Mr. V Hegde, Puzzolana designs and fabricates crushing plants, and trolley- and crawler-mounted portable plants, among other things. The firm sells machines under the brand, Puzzolana. The overall administration of the firm is managed by Mr. Prakash Pai, son-in-law of Mr. Hegde, and Mr. Ananth Pai, brother of Mr. Pankaj Pai, along with assistance from Mr. Abhijeet Pai, son of Mr. Prakash Pai. The promoters have, over the past two years, acquired stakes of 57 per cent and 100 per cent in two sick companies, Lotus Chocolate Firm Ltd and Southern Ferro Steel Pvt Ltd, respectively, for around Rs.300 million. PMF Engineering Limited, another group company, currently manufactures wheel loaders and plans to expand its product portfolio in the agriculture and construction equipment segment.
Puzzolana reported a profit after tax (PAT) of Rs.194 million on net sales of Rs.3097 million for 2007-08 (refers to financial year, April 1 to March 31), against a PAT of Rs.182 million on net sales of Rs.2442 million for 2006-07.
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Media Contacts
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Analytical Contacts
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CRISIL Rating Desk
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Mitu Samar
Head, Market Development & Communications
CRISIL Limited
Tel: +91-22- 6644 1838
Email: msamar@crisil.com
Tanuja Abhinandan
Market Development & Communications
CRISIL Limited
Tel: +91-22-6758 8046
Email: tabhinandan@crisil.com
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Gurpreet S Chhatwal
Director - CRISIL Ratings
Tel: +91-11-4250 5100
Email: gchhatwal@crisil.com
Pradeep K Aggarwal
Senior Manager - CRISIL Ratings
Tel: +91-11-4250 5100
Email: paggarwal@crisil.com
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Email: CRISILratingdesk@crisil.com
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