CARE Ratings has upgraded its rating on the bank facilities of IOL Chemicals & Pharmaceuticals worth Rs 350 crore.
The credit ratings agency has upgraded the rating of the company's long-term bank facilities to 'CARE A+; Stable' from 'CARE A; Stable'. It has also upgraded the ratings on the company's short-term bank facilities to 'CARE A1+' from 'CARE A1'.
The revision in the ratings assigned to the bank facilities of IOL Chemicals and Pharmaceuticals (IOL) takes into account its improved financial risk profile in FY21 (refers to period from April 01 to March 31) marked by healthy growth in the profitability and improved capital structure.
Further, the revision is also on account its strong liquidity and strengthening of debt service metrics.
The ratings continue to derive comfort from the experience of its promoters and the management team, integrated manufacturing facilities and well-established market position in key product (Ibuprofen) manufactured by the company.
The ratings continue to be tempered by the concentration of its total operating income through limited key products and susceptibility of IOL's operating margin to raw material price/price volatility.
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IOL Chemicals & Pharmaceuticals is engaged in the manufacturing of acetic acid with a total capacity of 1,35,068 Metric Tonne Per Annum (MTPA) as on 31 March 2021. The company is involved in manufacturing of chemicals (ethyl acetate, acetyl chloride, iso-butyl benzene etc.) and active pharmaceutical ingredients (ibuprofen, metformin, etc.). As on 31 March 2021, the total installed capacity of ibuprofen is 12,000 MTPA.
The company reported 17% drop in net profit to Rs 75 crore on 4% rise in total revenue from operations to Rs 467 crore in Q4 FY21 over Q4 FY20.
The scrip rose 0.80% to currently trade at Rs 671.90 on the BSE.
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