The Outlook is Stable.
Key Rating Drivers
The ratings reflect Prime Technoplast's limited track record in manufacturing woven sacks as well as its moderate liquidity and financial profile.
Provisional results for FY13 (year end March) indicate net financial leverage of 3.3x and EBITDA interest coverage of 1.2x, operating revenue of INR1,302.7m and EBITDA margin of 6.6pc .
The ratings are supported by Prime Technoplast's strong customer base comprising mainly the government of India and public sector units and fertiliser companies.
The ratings are also supported by the company's improved liquidity position due to an additional fund infusion of INR95m during FY13 by its founders and increased production capacity to 18,000 bales per month from 11,000 bales per month.
The company has set up state-of-the-art manufacturing facilities at Howrah in West Bengal.
Positive: Substantial growth in revenue with the maintenance of the present credit metrics could result in a positive rating action.
Negative: A substantial decline in revenue or EBITDA margins or deterioration in credit metrics and liquidity profile from the present levels will be negative for the ratings.
Prime Technoplast is a private limited company, incorporated in April 2009.
The company manufactures woven sacks made of high density polyethylene or polypropylene.
--IBNS (Posted on 16-08-2013)