CRISIL upgrades Kanpur Plastipack rating to ‘A-/A2+'; outlook revised to 'Stable'

7 Mar 2022 , 09:52 AM

CRISIL Ratings has upgraded its ratings on the bank facilities Rs292 crore of Kanpur Plastipack Ltd (KPL) (enhanced from Rs265 crore). The long-term rating has been upgraded to CRISIL A-/Stable from ‘CRISIL BBB+ / Positive’ and outlook revised to ‘Stable’). The Short Term rating has been upgraded to CRISIL A2+ from CRISIL A2.

The upgrade reflects a belief that the business risk profile of KPL will continue to improve, supported by optimal utilisation of the increased installed capacity, geographically diversified customer and supplier portfolios, and the recent rally in prices across the packaging industry. Sales worth Rs458 crore has been reported for the first nine months of fiscal 2022 and should reach over Rs600 crore by fiscal end, a 33% growth from sales worth Rs452 crore in fiscal 2021; the operating margin remained stable at 11-13%.
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The financial risk profile should continue to be healthy, despite capital expenditure (capex) of Rs96.78 crore planned for the medium term. The ratings continue to consider established market position of KPL, above-average operating efficiency and comfortable financial risk profile. These strengths are partially offset by exposure to intense competition in the packaging segment and limited diversification in revenue to few regions.

At around 9.56 am, Kanpur Plastipack Ltd was trading at Rs112 per piece down by Rs0.85 or 0.75% from its previous closing of Rs112.85 per piece on the BSE.