CRISIL assigns rating on Pondy Oxides -; Chemicals' bank facilities; Stock ends 8% higher

17 Jan 2022 , 03:34 PM

CRISIL Ratings has assigned its ‘CRISIL A-/Stable/CRISIL A2+’ ratings to the bank facilities of Pondy Oxides And Chemicals Limited (POCL).

As per rationale report, the rating reflects the strength in POCL’s business model, which is derived from its strong business risk profile, supported by well entrenched relationships with key customers, diversified procurement and supply base, moderate entry barriers and established manufacturing capabilities.

The rating also factors in the comfortable financial risk profile supported by adequate debt protection metrics, as the company largely uses debt for its working capital, while holding minimal term debt obligations. These strengths are partially off-set by exposure to stiff competition from both unorganised and organised players, susceptibility to fluctuations in raw material prices impacting profitability and risks associated with changes in government policies.

CRISIL Ratings believes POCL will continue to benefit from its established position in the Lead metal, Lead alloys, and other nonferrous metals business and from its long-standing relationships with customers.

Pondy Oxides & Chemicals ended at Rs520 per piece up by Rs40.2 or 8.38% on Sensex.