|
CRISIL has assigned its ‘BB+/Stable/P4+’ ratings to Salicylates and Chemicals Pvt Ltd’s (SCPL’s) bank facilities. The ratings reflect SCPL’s large working capital requirements leading to stretched liquidity and exposure to risks related to implementation and stabilisation of its capacity expansion plans over the medium term. These rating weaknesses are partially offset by SCPL’s strong track record in the chemical industry, mainly in the Paraben product segment, along with strong sales growth rate and high operating margin, and moderate financial risk profile, marked by healthy debt protection metrics.
Outlook: Stable
CRISIL believes that SCPL will continue to benefit over the medium term from its promoters’ extensive experience in the chemicals business and the healthy growth in sales of Paraben. The outlook may be revised to ‘Positive’ if the company’s operating profitability and revenues increase substantially. Conversely, the rating outlook may be revised to ‘Negative’ if SCPL undertakes larger-than-expected, debt-funded capital expenditure or reports low profitability in the sunscreen chemicals business.
About the Company
SCPL was incorporated on 1978 in Hyderabad for manufacturing organic chemicals, pharmaceuticals products. In 1982, the Sarvaiya family (existing management) acquired the company. The company is currently managed by Mr. Samir Sarvaiya. Initially, the company was manufacturing salicylic acid. The management has gradually revised its product mix and commenced manufacturing of Para Hydroxy Benzoic Acid [PHBA] in 1982. In 1985, the management decided to manufacture Parabens, supported by inhouse availability of PHBA. The company’s manufacturing facility is located in Hyderabad. The facility has a production capacity of about 1,380 metric tonnes (MT) per annum for Parabens and about 800 MT per annum for other chemicals.
SCPL has recently installed additional capacities in its existing facility for the manufacture of sunscreen chemicals for cosmetics and pharmaceutical industries. The commercial production of sunscreen chemicals is likely to commence in 2010-11(refers to financial year, April 1 to March 31).
SCPL reported a profit after tax (PAT) of Rs.26 million (provisional) on net sales of Rs.585 million for 2009-10, against a PAT of Rs.10 million on net sales of Rs.400 million for 2008-09.
|
 |
|
Media Contacts
|
Analytical Contacts
|
CRISIL Rating Desk
|
Mitu Samar
Head, Market Development & Communications
CRISIL Limited
Tel: +91-22- 3342 1838
Email: msamar@crisil.com
Tanuja Abhinandan
Market Development & Communications
CRISIL Limited
Tel: +91-22-3342 1818
Email: tabhinandan@crisil.com
|
Gurpreet S Chhatwal
Director - CRISIL Ratings
Tel: +91-11-4250 5100
Email: gchhatwal@crisil.com
Mohit Makhija
Senior Manager - CRISIL Ratings
Tel: +91-11-4250 5100
Email: mmakhija@crisil.com
| Tel: +1-22-3342 3047 / 3342 3064
Email: CRISILratingdesk@crisil.com
|
|
Note:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution of its rationales for consideration or otherwise through any media including websites, portals etc.
|
CRISIL Complexity Levels are assigned to various types of financial instruments. The CRISIL Complexity Levels are available on www.crisil.com/complexity-levels. Investors are advised to refer to the CRISIL Complexity Levels for instruments that they propose to invest in. Investors can also call the CRISIL Helpline at +91 22 3342 3047 / + 91 22 3342 3064 with queries on specific instruments.
|
|
CRISIL is India's leading Ratings, Research, Risk and Policy Advisory company. CRISIL leverages its core strengths of credibility and analytical rigour to deliver opinions and solutions, that help clients mitigate and manage their business and financial risks, make markets function better, and help shape public policy. For more information, visit www.crisil.com.
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.
|
|
