CRISIL has assigned its ‘BB/Stable/P4+’ ratings to the bank facilities of Stedman Pharmaceuticals Pvt Ltd (Stedman). The ratings reflect Stedman’s limited scale of operations in the domestic formulations market, and product concentration in its revenue profile. These rating weaknesses are partially offset by Stedman’s promoters’ experience in the pharmaceutical industry, and the company’s established brands.

Outlook: Stable
CRISIL believes that Stedman will maintain its financial risk profile over the medium term on the back of steady internal accruals from established brands. The outlook could be revised to ‘Positive’ if Stedman is able to generate higher-than-anticipated revenues and profits, or in case of infusion of equity into the company. Conversely, the outlook could be revised to ‘Negative’ if the company undertakes a large, debt-funded capital expenditure programme, or if there is a decline in its profitability.

About The Company
Stedman was incorporated by Mr. R Rajagopal in 1985, and started commercial production in 1991. The company manufactures and markets formulations in the antibiotic, antimicrobial, analgesic, antipyretic, antihistamine, multivitamin, and haematinic preparation segments. Stedman has a manufacturing facility located in the Small Industries Development Corporation (SIDCO) Pharmaceutical Estate near Chennai. The company’s major brands are Drez ointment and powder, Contus paediatric syrup, Aminorich capsules, Serronak tablets, and Trozan-Od tablets. In January 2006, Stedman entered into an equal joint venture (JV) with Anabond Ltd to form Anabond Stedman Pharma Research Pvt Ltd. This JV specialises in research and development of polymers and sealants for manufacturing of dental products, including dental composites and bonding agents.