CRISIL’s ratings on the bank facilities of Viswaat Chemicals Ltd’s (Viswaat) continue to reflect Viswaat’s above-average financial risk profile, marked by low gearing and moderate debt protection metrics, and established market position in the chemicals business, supported by diversified product profile and customer profile. These rating strengths are partially offset by the company’s limited pricing flexibility and the susceptibility of its margins to volatility in raw material prices.

Outlook: Stable CRISIL believes that Viswaat will maintain its established market position in the chemicals industry on the back of its diversified product profile and established relationship with customers. The outlook may be revised to ‘Positive’ if there is a substantial increase in its profitability, while maintaining its revenue growth or there is an improvement in its net worth on the back of equity infusion from promoters. Conversely, the outlook may be revised to ‘Negative’ if there is a steep decline in Viswaat’s profitability or there is deterioration in its financial risk profile on account of a large, debt-funded capital expenditure programme.

About the Company Viswaat, promoted by Mr. Vivek Shetty in 1996, manufactures leather chemicals, textile chemicals, drug intermediates and speciality chemicals of various varieties. The products of the company are used in diverse industries such as leather, pharmaceutical, textile, construction, and agrochemicals thus reducing its dependence on any one particular sector. The company’s production plant at Ambernath (Maharashtra) has an installed capacity to manufacture around 35,000 tonnes per annum of chemicals.

Viswaat reported a profit after tax (PAT) of Rs.34.7 million on gross sales of Rs.1.1 billion for 2010-11 (refers to financial year, April 1 to March 31), as against a PAT of Rs.24.4 million on gross sales of Rs.887 million for 2009-10.