| BDH Industries Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB-/Stable/Crisil A3' | ||||||
| Rating Action | ||||||
| ||||||
| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its 'Crisil BBB-/Stable/Crisil A3' ratings on the bank loan facilities of BDH Industries Limited (BDH).
The ratings continue to reflect extensive experience of the promoters in pharmaceutical industry and comfortable financial risk profile. These strengths are partially offset by modest and working capital intensive nature of operations and volatile operating profitability. |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of BDH. |
Key Rating Drivers & Detailed Description Strengths:
Experience of promoters have also led to an established position of the company in both domestic and international market, with nearly 45%-55% revenue generated from export to regions like Africa countries, Asian countries and Latin America.
The debt protection metrics of the company are also comfortable with interest coverage and net cash accruals to adjusted debt at 77.27 times and 0.94 time respectively for fiscal 2024. Interest coverage ratio for the first half of fiscal nine months ended December 2024 was over 100 times. Financial risk profile is estimated to remain comfortable over the medium term despite planned debt funded capex,
Weaknesses:
Operations are also working capital intensively as reflected in 196 Gross Current Asset (GCA) days as on March 2024. High working capital requirements are driven by high debtor days which stood at 122 days as on March 2024. Inventory days have remained moderate at 20-45 days for the past three fiscals through fiscal 2024. These requirements are financed through creditors and bank lines.
The company has reported an operating margin of ~16.79% for the first nine months of fiscal 2025. Sustained improvement in scale of operations and sustenance of operating margins at current levels will remain a key rating sensitivity factor. |
Liquidity: Adequate Liquidity is supported by an estimated net cash accrual of over Rs 9 crore against nil repayment obligations. Bank limit utilization averaged at 16.33% for the last 12 months ended February 2025.
The current ratio was healthy at 2.37 times as on March 2024. Free cash and cash equivalent balance stood at Rs 25-27 Cr as on February 2025. Company has capex plans which will be funded through available cash equivalents, Internal accruals and term loan if required. |
Outlook: Stable Crisil Ratings believes BDH's financial risk profile will remain above average over the medium term, supported by a moderate capital structure and healthy relationship with customers. |
Rating sensitivity factors Upward factors:
Downward factors:
|
About the Company Established in 1990, BDH manufactures pharmaceutical formulations. Mr S C Kachhara, the joint managing director, manages operations. Products include formulations for anticancer, antifungal, anti-malarial, and other treatments in the form of tablets, capsules, injectables, and external preparations. |
Key Financial Indicators
|
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
|
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||
|
Criteria Details
|