Rossari Biotech rose 0.42% to Rs 1170 amid some bit of bargain hunting.
The stock declined 2.4% in the past two sessions to end at Rs 1,165.10 yesterday, from its recent closing high of Rs 1,193.75 recorded on 12 July 2021.
In the past six months, the stock has zoomed 39.24% while the benchmark Sensex has added 8.60% during the same period.
In an exchange filing made after market hours yesterday, Rossari Biotech said that ICRA assigned a rating of '[ICRA]AA- (Stable)' on the fund-based working capital facilities worth Rs 82 crore and unallocated limit of the company worth Rs 74.39 crore.
The ratings agency has assigned '[ICRA]A1+' rating on the non-fund based limit of the company worth Rs 23.61 crore.
ICRA said that the assigned ratings consider the extensive experience of the management and the established track record of Rossari Biotech (Rossari) in the speciality chemical manufacturing business, spanning around two decades. The ratings consider the company's healthy financial risk profile, characterised by healthy profit margins and return indicators.
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Further, the capital structure and coverage indicators are strong aided by funds raised through IPO in FY2021, post which the company became debt free. The ratings also factor in the company's established market position in the textile speciality chemical industry, its strong in-house research and development (R&D) facilities, increasing diversification in product portfolio and established relationships with a wide customer base.
Moreover, the ratings factor the completion of the recent equity fund raising exercise of Rs. 300 crore, which indicates the strong financial flexibility of the company as well as boosts its net worth base.
While the recent announcement of acquisition of Unitop Chemicals (Unitop) would support the further scaling up of operations significantly as well as provide diversification benefits, the fund raised ensures the strong liquidity position even after completion of the acquisition.
The assigned ratings are, however, constrained by the exposure of Rossari's profitability to adverse movement in raw material prices, though the company has been able to pass on the price rise to its customers to a certain extent.
Further, the ratings factor in the competition in the speciality chemicals segment from domestic players as well as large multinational companies, which restricts the pricing flexibility.
The 'stable' outlook on the [ICRA]AA-rating reflects ICRA's opinion that the company will continue to benefit from the extensive experience of its promoters in the speciality chemical industry and is likely to witness healthy revenue growth.
Further, the credit profile of Rossari is expected to remain stable with strong liquidity position and equity funded acquisition.
Rossari Biotech is a speciality-chemicals manufacturer providing intelligent and sustainable solutions for customers across industries.
The company reported a 47.1% jump in consolidated net profit to Rs 22.2 crore on a 36.8% rise in net sales to Rs 218.22 crore in Q4 FY21 over Q4 FY20.
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