CARE reaffirms Nahar Poly Films credit ratings; Revises outlook to Positive from Stable

11 Jan 2022 , 01:09 PM

CARE Ratings has assigned credit rating to Nahar Poly Films Limited total bank facilities worth Rs235.98cr.

The rating on long-term bank facilities Rs220.98cr (reduced from Rs232cr) has been reaffirmed at CARE A-; Positive. Outlook revised from Stable.

On short-term bank facilities, Rs15cr the credit rating of the company was reaffirmed at CARE A2+.

At around 1.12 pm, Nahar Polyfilms Ltd was trading at Rs333.10 per share down by Rs2.65 or 0.79% from its previous closing of Rs335.75 per share on the BSE.

“The ratings assigned to the bank facilities of Nahar Poly Films Limited (NPFL) continue to derive strength from experienced promoters, high financial flexibility enjoyed by virtue of it being part of diversified Nahar group, wide-range of product profile and broad customer base,” company shared CARE Ratings rationale.

The ratings further derive strength from the established brand name, growing scale of operations with healthy profitability margins reported in FY21 (refers to period from April 01 to March 31) and H1FY22 (refer to period from April 01 to September 30), comfortable overall solvency position despite large debt funded capex undertaken in the past two fiscals, and efficient working capital management.

It further said, the rating takes cognizance of large-size expansion capacity for biaxially-oriented polypropylene (BOPP) films under advanced stage of commissioning with expected commercial operation date from January 2022 and remains exposed to the stabilization and off-take risk for the augmented capacity.

The ratings, however, remain constrained by susceptibility of margins to raw material price fluctuations, product mix sold and foreign exchange fluctuations along with highly competitive nature of the industry.