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CRISIL has assigned its ‘BB/Stable/P4+’ ratings to Propack Industries (prop Kunal Plastics Pvt. Ltd) (PI’s) bank facilities. The ratings reflect PI’s modest financial risk profile. This rating weakness is partially offset by PI’s established relationships with customers.
For arriving at its ratings, CRISIL has combined the business and financial risk profile of Propack Industries (prop Kunal plastics Pvt. Ltd) and its group concern Janaki Plastics, collective referred to as Propack Industries. This is on account of common management, significant business and financial fungibility and promoter’s intent to merge the two entities in the near future.
Outlook: Stable
CRISIL believes that PI will maintain its established market position in the packaging material business and benefit from its promoters’ industry experience over the medium term. The outlook may be revised to ‘Positive’ if PI’s financial risk profile improves, driven most likely by higher-than-expected growth in revenues and earnings, while maintaining its gearing and debt protection metrics. . Conversely, the outlook may be revised to ‘Negative’, if PI’s debt protection metrics deteriorate due to lower-than-expected growth in revenues and earnings and high debt funded capex.
About the Firm
PI was set up by the late Mr. Thakorebhai Vashi in 1970 as a partnership firm, after the retirement of the partners; the business was taken over by Kunal Plastics Private Ltd., which was promoted by Vashi Family. The current shareholders of PI are Ms. Ameeta Desai, Ms Alkaben Desai and Ms. Charulata Patel in equal proportions and Janaki Plastics are Mr. Bankimbhai Desai, Mr. Jayminbhai Desai and Mr. Nitinbhai Patel in equal proportions. The company manufactures flexible packaging material for companies in fast-moving consumer goods (FMCG) sector.
PI reported a profit after tax (PAT) of Rs.11.6 million on net sales of Rs.331.4 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of Rs.4.6 million on net sales of Rs.311.2 million for 2008-09.
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Analytical Contacts
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CRISIL Rating Desk
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Mitu Samar
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Tanuja Abhinandan
Market Development & Communications
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Gurpreet S Chhatwal
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Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. CRISIL Ratings’ rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 3342 3000.
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