CRISIL Ratings has upgraded its ratings on the bank facilities of 20 Microns Limited (ML, part of the 20ML group) to *CRISIL BBB+/Stable/CRISIL A2' from 'CRISIL BBB/Stable/CRISIL A3+'.
'The rating upgrade reflects CRISIL's expectations of sustenance of 20 ML group's business profile and improved financial isk profile. The action also factors company's exit from corporate debt restructuring (CDR) and release of the pledged shares by banks.
'The group has clocked a turnover of Rs. 444 cr till December 2021 with an estimated growth of more than 20 % over last fiscal. Simultaneously, the operating margin is estimated over 13% with steady working capital cycle. The performance has been supported by healthy rebound in demand and group's well entrenched presence. Over medium term, the group is expected to maintain an annual growth rate of 10% with steady margin on back of its established presence, continued focus 'on customer and product addition.
20 ML group's financial profile has consolidated sequentially backed by healthy annual cash accruals, reduction in debt levels, borrowing costs and absence of any significant capex plans. 20 ML group's net worth and TOLTNW are estimated around Rs, 250 cr and 1 times as on March 31, 2022. Group is expected to generate annual cash accruals around Rs. 55 cr in the coming fiscals which together with steady working capital cycle shall ensure continued improvement in leverage ratio.
Further CRISIL notes, ML has exited CDR paying Rs. 11.55 cr to its banks as part of recompense. Though the recompense is higher than previously expected, same has been funded internally and has not affected liquidity, Company's exit from CDR, release of pledged shares enhances the financial flexibility of company and raises the ability to raise funds in case of any exigency, Pursuant to the CDR exit process, company has also been able to bring down its borrowing rates significant, which shall result in improved debt protection measures for the group.
The ratings reflect the group's established market position, healthy financial profile and sound operating efficiencies. These strengths are partially offset by its capital intensive operations, susceptibility to adverse changes in government regulations, and concentration in end-user industries.
Shares of 20 Microns Limited was last trading in BSE at Rs. 78.80 as compared to the previous close of Rs. 76.70. The total number of shares traded during the day was 53278 in over 1597 trades.
The stock hit an intraday high of Rs. 80.40 and intraday low of 76.75. The net turnover during the day was Rs. 4203781.00.