Key Rating Drivers
The upgrade reflects regularisation of all rated bank loans limits over the 12 months ended November 2013.
The ratings also reflect SOPL's EBITDA margins which turned positive in FY13 (year ended March) to 16.2% (FY12: negative 42.9%) on stable market conditions and better cost management.
The affirmation of the Long-Term Issuer Rating reflects SOPL's continued delays in servicing the term loan availed from West Bengal Industrial Development Corporation Limited over the 12 months ended November 2013.
This loan is not rated by the agency.
Positive: The ratings could be upgraded if there is no delay/default in any of the outstanding debts for a quarter.
Kolkata-based SOPL is a photo-voltaic modules manufacturer and has an 18MW manufacturing plant in Durgapur.
The company is also involved in engineering, procurement and construction of solar power plants.
Total outstanding debt as at FYE13 was INR310m (FYE12: INR227.7m). Cash flow from operations was negative INR105.8m in FY13 due to increased working capital requirements over FY12 with a rise in business volume.
Ind-Ra expects it to remain negative in near-to-medium term.
--IBNS (Posted on 19-12-2013)