January 06, 2014

Mumbai

Moon Beverages Limited

Rated Amount Enhanced

Total Bank Loan Facilities Rated	Rs.535 Million (Enhanced from Rs.445 Million)
Long-Term Rating	CRISIL A+/Stable (Reaffirmed)
Short-Term Rating	CRISIL A1+ (Reaffirmed)

(Refer to Annexure 1 for details on facilities)

CRISIL’s ratings on the bank facilities of Moon Beverages Ltd (MBL) continue to reflect MBL’s stable market position, backed by its exclusive franchisee agreement with The Coca-Cola Company (rated ‘AA-/Stable/A-1+’ by Standard & Poor’s), and healthy operating efficiencies because of its presence in the returnable glass bottle and polyethylene terephthalate (PET) bottle segments. The ratings also factor in the company’s healthy financial risk profile, marked by moderate gearing, healthy debt protection metrics, and large liquid investments in the form of fixed deposits. These rating strengths are partially offset by geographical concentration in MBL’s revenue profile, and its vulnerability to regulatory changes.

For arriving at the ratings, CRISIL has combined the business and financial risk profiles of MBL and its subsidiary, Hindustan Aqua Ltd (HAL). This is because the two companies, together referred to herein as MBL, are in the same line of business, and MBL has extended unsecured loans to HAL and has provided corporate guarantees for the latter’s bank lines.

Outlook: Stable

CRISIL believes that MBL will maintain its healthy financial risk profile and stable market position over the medium term. The outlook may be revised to ‘Positive’ if MBL achieves more-than-expected improvement in its revenues and operating margin while maintaining its healthy financial risk profile, backed by large liquid investments. Conversely, the outlook may be revised to ‘Negative’ if MBL records lower-than-expected revenue growth and operating margin, undertakes any large, debt-funded capital expenditure programme, or provides more-than-expected funding support to its associate companies, leading to significant deterioration in its financial risk profile, particularly liquidity.

About the Company

MBL, incorporated in 1987, is promoted by the MM Agarwal group of Kanpur (Uttar Pradesh). MBL is one of the largest franchisee bottlers for The Coca-Cola Company. It initially operated as a franchisee bottler for Parle Soft Drinks Ltd. Currently, MBL has the exclusive bottling and distribution franchise of The Coca-Cola Company, covering one-third of the National Capital Region (NCR) for its carbonated soft drinks line and the entire NCR for its packaged drinking water (Kinley brand). MBL manufactures and distributes sparkling soft drinks and packaged drinking water. HAL deals in co-pack bottling arrangement; production is carried out by HAL, and sale and marketing by Hindustan Coca-Cola Beverages Private Limited. HAL has two bottling plants, in Kanpur and Rourkela.

MBL, on a consolidated basis, reported a profit after tax (PAT) of Rs.88 million on net sales of Rs.2.2 billion for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of Rs.63 million on net sales of Rs.2.0 billion for 2011-12.

Annexure 1 - Details of various bank facilities

Current Facilities			Previous Facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Letter of Credit	215	CRISIL A1+	Letter of Credit	215	CRISIL A1+
Overdraft Facility	250	CRISIL A+/Stable	Overdraft Facility	160	CRISIL A+/Stable
Term Loan	70	CRISIL A+/Stable	Term Loan	70	CRISIL A+/Stable
Total	535	--	Total	445	--

Media Contacts	Analytical Contacts	Customer Service Helpdesk
Tanuja Abhinandan Communications and Brand Management CRISIL Limited Phone: +91-22- 3342 1818 Email:tanuja.abhinandan@crisil.com Shweta Ramchandani Communications and Brand Management CRISIL Limited Phone: +91 22 3342 1886 Email: shweta.ramchandani@crisil.com	Nagarajan Narasimhan Senior Director - CRISIL Ratings Phone: +91-22-3342 3536 Email:nagarajan.narasimhan@crisil.com Sridhar C Director - CRISIL Ratings Phone: +91-22-3342 3546 Email: chandrasekhar.sridhar@crisil.com	Timings: 10.00 am to 7.00 pm Toll free number: 1800 267 1301 Email:CRISILratingdesk@crisil.com

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CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.

About CRISIL Ratings
CRISIL Ratings is India's leading rating agency. We pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we have a leadership position. We have rated over 60,000 entities, by far the largest number in India. We are a full-service rating agency. We rate the entire range of debt instruments: bank loans, certificates of deposit, commercial paper, non-convertible debentures, bank hybrid capital instruments, asset-backed securities, mortgage-backed securities, perpetual bonds, and partial guarantees. CRISIL sets the standards in every aspect of the credit rating business. We have instituted several innovations in India including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We pioneered a globally unique and affordable rating service for Small and Medium Enterprises (SMEs).This has significantly expanded the market for ratings and is improving SMEs' access to affordable finance. We have an active outreach programme with issuers, investors and regulators to maintain a high level of transparency regarding our rating criteria and to disseminate our analytical insights and knowledge.

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Last updated: May, 2013

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