| Kopran Limited | ||||||
| Ratings placed on 'Watch Developing' | ||||||
| Rating Action | ||||||
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| 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 placed its ratings on the bank facilities of Kopran Limited (Kopran; part of Kopran group) on ‘Rating Watch with Developing Implications’.
The rating has been placed on watch following the announcement made by Kopran regarding the proposed scheme of amalgamation of Kopran Laboratories Limited (KLL) into Kopran. While Kopran has received Board approval other requisite approvals from shareholders, Bombay stock exchange and National Company Law Tribunal are pending. Crisil Ratings will continue to monitor the progress of the amalgamation and will resolve the watch with appropriate rating action post completion of the same.
The ratings continue to reflect the established market presence driven by extensive experience of promoters in the pharmaceutical industry, and comfortable financial risk profile. These strengths are partially offset by the susceptibility of operating profitability to volatility in raw material prices and working capital intensive nature of operations |
Analytical Approach For arriving at its ratings, Crisil Ratings continues to fully consolidate the business and financial risk profiles of Kopran and its wholly-owned subsidiaries, Kopran Research Laboratories Limited (KRLL), Kopran Lifesciences Ltd, and Kopran (HK) Ltd, Hong Kong, and Kopran (UK) Ltd, collectively referred to as the Kopran group, as they are in the similar line of business and have significant operational and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
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 80% revenue generated from export to regions like Africa, United Kingdom, Hong Kong amongst others.
On the back of the experience of the promoters, the group has achieved a revenue of Rs 457 Cr till December 2024.
The debt protection metrics of the group are also comfortable with interest coverage and net cash accruals to adjusted debt at 9.57 times and 0.50 time respectively for fiscal 2024.Interest coverage ratio for the first nine months of fiscal 2025 stood at 8.72 times. Financial risk profile is estimated to remain comfortable over the medium term with absence of any debt funded capex.
Weaknesses:
Increase in GCA days was a result of higher debtor days which stood at 127 days as on March 31, 2024, which have reduced marginally to 113 days as on September 2024. Inventory days continue to remain moderate and averaged at 111 days for the past three fiscals through fiscal year 2024. These working capital requirements are financed through internal accruals and creditors, which stood at 101 days as on March 31, 2024.
The group has reported operating margins of 12.09% for the nine months ending December 31, 2024. 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 49 crore against repayment obligations of Rs 1.5-1.85 Cr. Bank limit utilization averaged at 48% for the last 15 months ended May 2024.
The current ratio was healthy at 2.08 times as on March 2024. Group had a cash and cash equivalent balance of Rs 8.30 Cr as on September 2024. |
Rating sensitivity factors Upward Factors
Downward Factors
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About the Group Kopran was incorporated in 1958, promoted by the Mumbai-based Somani family. The company, which is a part of the Parijat group, is managed by Mr Surendra Somani. It manufactures pharmaceutical formulations such as antibiotics, anti-malarial, analgesics, and cardiovascular and bulk drugs at its facilities in Mahad and Khopoli in Maharashtra. In fiscal 2015, the bulk drugs division was transferred to KRLL through a slump sale. Kopran Lifesciences Ltd and Kopran (HK) Ltd, Hong Kong are small entities and nearly defunct |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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