Long term ratings has been upgraded at [ICRA]A with Stable outlook and short term rating for bank guarantee is upgrated to [ICRA]A1.
According to the Rationale, the rating upgrade of KPL factors in the improvement in capacity utilisation, favourable change in feedstock procurement mix mitigating the under recoveries on residual feedstock, improvement in the cost structure due to various cost control measures undertaken by the company in the recent fiscals and expected volume growth due to approval received to operate at higher capacity.
The ratings continue to consider the dominant position of Kothari Petrochemicals Limited (KPL) in the domestic poly isobutylene (PIB) market and its established relationships with feedstock suppliers, which mitigate the raw material availability risks.
The Stable outlook reflects ICRA’s opinion that KPL will continue to benefit from its extensive experience and dominant market share in the PIB segment in the country.
Kothari Petrochemicals Ltd is currently trading at Rs24.35 down by Rs0.25 or 1.02% from its previous closing of Rs24.60 on the BSE, at around 3:25 PM.