CRISIL has assigned its ‘BB/Stable/P4+’ ratings to the bank facilities of Ambika Solvex Ltd (ASL). The ratings reflect ASL’s susceptibility to economic downturns, volatility in soya prices, intense market competition, and adverse regulatory changes in the soya industry. These rating weaknesses are partially offset by ASL’s promoters’ experience in the soya industry.

Outlook: Stable
CRISIL believes that ASL will continue to generate steady cash accruals and benefit from emerging markets for its products and from the operating efficiencies arising out of its recently commissioned power plant for captive consumption. The outlook may be revised to ‘Positive’ if there is a significant increase in ASL’s revenues and improvement in margins. Conversely, the outlook may be revised to ‘Negative’ if ASL’s cash accruals decline substantially, adversely affecting its debt protection metrics.

About the Company
ASL is promoted by Mr. Vinodkumar Garg, Mr. Shivkumar Hotwani, Mr. Nandkishore Agarwal and Mr. Kailash Chandra Garg. It was incorporated as a private limited company in 1992 and reconstituted as a closely held public limited company in 1995. ASL manufactures raw and refined soya bean oil and soya bean meal. ASL has solvent extraction capacity of 13,50,500 tones per annum (tpa) and refining capacity of 1,46,000 tpa. Its solvent extraction plants are located in Akola, Maharashtra state and Jaora, Kalapipal, and Pathariya in Madhya Pradesh.I Its refineries are in Akola, Kalapipal, and Pathariya. It has set up 2 power plants for captive consumption at Kalapipal and Jaora with total capacity of 3.6 mega watts.

ASL reported a profit after tax (PAT) of Rs.167.0 million on net sales of Rs.7810.0 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of Rs.111.2 million on net sales of Rs.7337.0 million for 2008-09.