By Tanmoy Dey

India Ratings and Research (Ind-Ra) has affirmed The Phosphate Company Limited (TPCL) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable.

KEY RATING DRIVERS

The affirmation reflects TPCL’s moderate scale of operations with revenue of INR715.3m during FY15 (FY14: INR696.6m). The ratings also reflect TPCL’s weak credit profile with interest coverage of 0.9x in FY15 (FY14: 0.9x), net financial leverage 8.4x (8.2x) and EBITDA margins of 6.9% (6.7%).

 

The ratings also consider TPCL’s moderate liquidity profile with 77% utilisation of the working capital facility for the 12 months ended October 2015.

 

The ratings are supported by the over three decades of experience of TPCL’s directors in manufacturing fertilisers and the company’s strong relationships with its customers and suppliers.


RATING SENSITIVITIES

Positive: A sustained improvement in the credit metrics will be positive for the ratings.

 Negative: Further deterioration in the credit metrics will be negative for the ratings.

 


COMPANY PROFILE

TPCL is one of the oldest single super phosphate manufacturing units in eastern India. The company was incorporated in 1949. Its registered office is in Kolkata and its manufacturing unit is in Rishra, Hooghly district - West Bengal.

 

TPCL manufactures fertilisers and has an installed capacity of 9,400mtpa. It supplies goods to local wholesale dealers who then sell the fertilisers to farmers and other consumers under the brand name of Lakshmi Brand. The management is also planning to launch a new product line of pesticides and herbicides.



SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings.

 

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer.

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Applicable Criteria

Analyst Names

  • Primary Analyst

    Tanmoy Dey

    Analyst
    India Ratings and Research Pvt Ltd Room No. 1201, 12th Floor Om Towers 32, Chowringhee Road Kolkata 700 071

    Media Relation

    Mihir Mukherjee

    Manager Corporate Communications and Investor Relations
    +91 22 40356121