Rating Rationale
September 06, 2017 | Mumbai
NGL Fine Chem Limited
Ratings Reaffirmed
Rating Action
Total Bank Loan Facilities Rated Rs.50.89 Crore
Long Term Rating CRISIL BBB/Stable (Reaffirmed)
Short Term Rating CRISIL A3+ (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has reaffirmed its 'CRISIL BBB/Stable/CRISIL A3+' ratings on the bank facilities of NGL Fine Chem Ltd (NFC). The ratings continue to reflect the company's healthy financial risk profile and the experience of its promoters in the pharmaceuticals industry. These strengths are partially offset by its modest scale and working capital-intensive operations. 

Key Rating Drivers & Detailed Description
* Healthy financial risk profile
The financial risk profile is supported by comfortable networth and gearing of Rs 58.3 crore and 0.39 time, respectively, as on March 31, 2017. Debt protection metrics are strong due to healthy profitability and controlled reliance on debt.
* Experience of the promoters in the pharmaceuticals industry
NFC manufactures bulk drugs and intermediates for human and veterinary diseases. It primarily manufactures active pharmaceutical ingredient (APIs) under the antiprotozoal therapeutic category. The promoters, Mr Rahul Nachane and Mr Rajesh Lawande, have experience of over a decade in the pharmaceuticals industry. Their expertise and experience have helped NFC establish its presence in the highly fragmented bulk drugs industry and establish relationships with clients, which will support the company's business risk profile over the medium term.
* Modest scale and working capital-intensive operations
NFC's scale of operations is modest, compared with that of established players in the domestic pharmaceuticals industry. Also, operations are moderately working capital intensive. The company extends credit of 90-120 days to its clients. It has to maintain raw material inventory of 30-60 days to cater to urgent demand and remain competitive. Ability to scale up operations in the coming quarters, improvement in the margins and management of its working capital cycle will be a key determinant of its credit risk profile over the medium term.
Outlook: Stable

CRISIL believes NFC will continue to benefit from its promoters' industry experience and established customer relationships. The outlook may be revised to 'Positive' if revenue and profitability improve on a sustained basis while financial risk profile remains healthy. The outlook may be revised to 'Negative' if the business performance weakens considerably, and if capital structure and key debt protection metrics are hit by larger-than-expected, debt-funded capital expenditure or acquisition, or if working capital cycle lengthens.

About the Company

Incorporated in 1981, NFC is managed by Mr Rahul Nachane and Mr Rajesh Lawande. The company manufactures human and veterinary bulk drugs, intermediates, and formulations. It primarily deals in animal healthcare products such as antiprotozoal, anthelmintics, and growth promoters. Its administrative office is in Mumbai and manufacturing facilities are in Tarapur and Navi Mumbai in Maharashtra. 

Key Financial Indicators
Particulars Unit 2017 2016
Revenue Rs. Cr. 100.2  96.3 
Profit After Tax Rs. Cr. 14.3  11.4
PAT Margins % 14.3 11.8
Adjusted Debt/Adjusted Net worth Times 0.39  0.33
Interest coverage Times 26.1  14.1

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
ISIN Name of instrument Date of allotment Coupon
rate (%)
Maturity date Issue size
(Rs cr)
Rating assigned with outlook
NA Letter of credit NA NA NA 4.8 CRISIL A3+
NA Cash credit NA NA NA 8.0 CRISIL BBB/Stable
NA Term loan NA NA 31-Oct-2021 25.3 CRISIL BBB/Stable
NA Proposed long-term bank loan facility NA NA NA 4.79 CRISIL BBB/Stable
NA Packing credit NA NA NA 8.0 CRISIL A3+
Annexure - Rating History for last 3 Years
  Current 2017 (History) 2016  2015  2014  Start of 2014
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  46.09  CRISIL BBB/Stable/ CRISIL A3+    No Rating Change  28-12-16  CRISIL BBB/Stable/ CRISIL A3+  20-11-15  CRISIL BBB-/Positive    No Rating Change  CRISIL BBB-/Stable 
            09-05-16  CRISIL BBB-/Positive/ CRISIL A3           
Non Fund-based Bank Facilities  LT/ST  4.8  CRISIL A3+    No Rating Change  28-12-16  CRISIL A3+    No Rating Change    No Rating Change  CRISIL A3 
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Cash Credit 8 CRISIL BBB/Stable Cash Credit 8 CRISIL BBB/Stable
Letter of Credit 4.8 CRISIL A3+ Letter of Credit 4.8 CRISIL A3+
Packing Credit 8 CRISIL A3+ Packing Credit 8 CRISIL A3+
Proposed Long Term Bank Loan Facility 4.79 CRISIL BBB/Stable Proposed Long Term Bank Loan Facility 12.29 CRISIL BBB/Stable
Term Loan 25.3 CRISIL BBB/Stable Term Loan 17.8 CRISIL BBB/Stable
Total 50.89 -- Total 50.89 --
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
Rating Criteria for the Pharmaceutical Industry
Criteria for rating Short-Term Debt (including Commercial Paper)

For further information contact:
Media Relations
Analytical Contacts
Customer Service Helpdesk
Saman Khan
Media Relations
CRISIL Limited
D: +91 22 3342 3895
B: +91 22 3342 3000

Naireen Ahmed
Media Relations
CRISIL Limited
D: +91 22 3342 1818
B: +91 22 3342 3000

Jyoti Parmar
Media Relations
CRISIL Limited
D: +91 22 3342 1835
B: +91 22 3342 3000

Salim Yahoo
Director - CRISIL Ratings
CRISIL Limited
D:+91 22 3342 3031

Aditya Munshi
Associate Director - CRISIL Ratings
CRISIL Limited
D:+91 22 4097 8105

Girish Bhirud
Rating Analyst - CRISIL Ratings
CRISIL Limited
D:+91 22 4097 8219
Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
For Analytical queries:


Note for Media:
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 (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc.

About CRISIL Limited

CRISIL is a global, agile and innovative analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers.

We are majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com 


About CRISIL Ratings
CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us.


CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of S&P Global Inc. and its subsidiaries (collectively, the “Company) you may find of interest.

For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view the Company’s Customer Privacy at https://www.spglobal.com/privacy

Last updated: April 2016


This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, the term “Report” includes the information, ratings and other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional advice before acting on the Report in any way.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL