CRISIL has downgraded its rating on the long-term bank facilities of Polychroic Petrochemicals Pvt Ltd (PPPL) to ?B-/Stable? from ?B/Stable?, while reaffirming the rating on the short-term facility at ?P4?.

* One way interchangeable between PC to Post Shipment allowed

The downgrade reflects CRISIL?s belief that PPPL?s liquidity will remain weak over medium term because of the company?s weak operating profitability resulting in low cash accruals vis-?-vis debt servicing commitments.

The ratings continues to reflect PPPL?s weak financial risk profile, marked by a small net worth, a high gearing, and modest cash accruals. The ratings also factor in the company?s subdued pricing flexibility because of exposure to intense industry competition. These rating weaknesses are partially offset by PPPL?s integrated facility for manufacturing flexible intermediate bulk containers (FIBC) and the expected improvement in the company?s capacity utilisation.

Outlook: Stable

CRISIL believes that PPPL will maintain its business risk profile on the back of improvement in capacity utilisation levels, over the medium term. The outlook may be revised to ?Positive? if there is significant improvement in PPPL?s accruals, thereby improving the company?s debt protection metrics. Conversely, the outlook may be revised to ?Negative? in case of further deterioration of PPPL?s capital structure, or weakening of the company?s liquidity.