Long term and short term bank facilities has been reaffirmed to CARE A+/Positive and CARE A1+.
The ratings continue to factor in the strength of JPFL’s established market position in the Indian packaging film industry, the promoter group having a long track record of operations, its healthy operational performance with a comfortable financial profile characterized by a healthy capital structure, above-average debt coverage indicators and strong liquidity position.
The ratings take into cognizance the resilient financial performance of the company in FY21 despite Covid’19 lockdown restrictions.
The ratings also factor in the higher than scheduled debt repayments by the company during FY21 and reduction in debt levels going forward. These rating strengths are, however, partially offset by debt-funded capacity addition and stiff competition in the industry on account of demand-supply disparity, which continues to be a key risk due to commoditized nature of the product.
The outlook of the rating is positive on account of expectation of reduction in net debt level of JPFL due to strong cash accrual on account of favourable demand supply characteristics in flexible packaging and non-woven segment.
Jindal Poly Films ended at Rs890.55 apiece down by Rs21.6 or 2.37% on the BSE.