CRISIL has assigned its bank loan ratings of ‘BBB-/Stable’ to the various bank facilities of Sindhu Cargo Services Ltd (SCSL). The ratings reflect SCSL’s established position in the freight forwarding, transportation, warehousing and consultancy business, backed by strong relationships with clients. The ratings are also underpinned by SCSL’s above-average financial risk profile, marked by comfortable gearing and debt protection measures. These strengths are partly offset by SCSL’s small size, its exposure to risks relating to intense competition, highly-fragmented nature of industry and reduced margins, and high working capital requirements.

Outlook: Stable
CRISIL believes that SCSL will maintain its business and financial risk profile, supported by long-standing client relationships and the strong growth prospects of the industry. Better than expected improvement in financial profile, due to higher accruals or diversity in revenue profile, may result in a revision in outlook to ‘Positive’. Conversely, any significant debt-funded capital expenditure or unrelated diversifications may result in a revision in outlook to ‘Negative’.

About SCSL:
SCSL began operations as a customs house agent in 1987. Initially, it was a partnership firm with three partners, one of them being the current Managing Director, Mr. G Balaraju. It was converted to a private limited company in 1991, and into a public limited company in 2001. From a customs clearance and forwarding agent, SCSL has gradually expanded its operations into freight forwarding, transportation, warehousing and consultancy. For 2006-07 (refers to financial year, April 1 to March 31), SCSL reported a net profit of Rs.30 million on net sales of Rs.780 million.