CRISIL has assigned its 'CRISIL BBB/Stable/CRISIL A3+' ratings to the bank facilities of Saraswati Agro Chemicals India Private Limited (SACIPL).

The rating reflects the extensive experience of the promoters and established presence in the agro chemical industry, established relationship with key customers and a comfortable financial risk profile. These rating strengths are partially offset large working capital requirements and vulnerability to risk inherent in the agro-chemicals industry.

Over the years, the company developed strong manufacturing capabilities with multi location and dedicated units for its customers. It established strong association with key customers ' Bayer Cropscience and BASF India among others which helped it to scale up its operations over the years.

Further the company has recently forayed into marketing and sale of own branded pesticides which has provided it a revenue diversity. Though group's revenue has degrown in last three fiscals through 2020, its profitability margin had risen steadily backed by discontinuation of low margin contract manufacturing business.

Further with setup of SPIPL, a backward integration into manufacturing PET bottles used for packaging liquid pesticides, the Saraswati group now has presence across the pesticides manufacturing with quality packaging facilities which support its business risk profile.

The networth was healthy at over Rs 179.2 crore and the gearing and TOLTNW ratios adequate at 1.10 times and 1.47 times, as on March 31, 2020. Debt protection metrics also were quite adequate with interest coverage and net cash accruals to total debt ratio of over 5.11 times and 0.24 times in fiscal 2020. Although the company has capex plans and large incremental working capital requirements over medium term, its financial risk profile should continue to remain comfortable backed by healthy accretions.

CRISIL believe SACIPL will continue to benefit from the extensive experience of its promoter, and established relationships with clients.