CRISIL has assigned its ratings of ‘BB-/Stable/P4+’ to the bank facilities of Healthcaps India Ltd (HIL). The ratings reflect HIL’s moderate business risk profile, marked by modest scale of operations, and exposure to risks relating to geographical and customer concentration in its revenue profile. These weaknesses are, however, partially offset by the company’s established presence in the domestic gelatine capsule industry, and above-average financial risk profile, marked by healthy topline growth, and comfortable capital structure and debt protection measures.

Outlook: Stable
CRISIL expects HIL to maintain a stable credit risk profile on the back of established presence in the empty gelatine capsules industry, and consistent operating efficiencies. The outlook may be revised to ‘Positive’ if the company’s topline and profitability improve substantially leading to stronger debt protection measures. Conversely, the outlook may be revised to ‘Negative’ in case there is an increased pressure on liquidity deteriorating financial flexibility of the company.

About the Company
Incorporated in 1983, by Mr. Chiranjiv Singh, HIL manufactures and sells empty hard-gelatin capsules. Its manufacturing unit at Fatepur (Punjab) has capacity to produce 5 billion capsules per annum, which is the second largest capacity in India. It sells its products to pharmaceutical companies such as Maxheal Pharmaceuticals Private Ltd, Cipla Ltd and Wockhardt Ltd. The company has an in-house research and development department, and marketing offices at Baddi (Himachal Pradesh), Chandigarh, New Delhi, and Mumbai. HIL reported a profit after tax (PAT) of Rs.13.7 million on net sales of Rs.214.8 million for 2008-09 (refers to financial year, April 1 to March 31), as against a PAT of Rs.7.6 million on net sales of Rs.179.6 million for 2007-08.