By: ICN Bureau
Last updated : January 06, 2021 7:00 am
VOL has achieved revenue of Rs.674.93 crore and profitability of 26.6% in fiscal 2020; further it has reported Rs 314.17 crore in H1 FY2021 while profitability continues to remain healthy at about 30%.
CRISIL has reaffirmed its ratings on the long-term bank facilities of Valiant Organics Limited (VOL) at 'CRISIL A-/Positive'. The positive outlook reflects VOL's strong business risk profile which remained resilient to Covid-19 pandemic.
VOL has achieved revenue of Rs.674.93 crore and profitability of 26.6% in fiscal 2020; further it has reported Rs 314.17 crore in H1 FY2021 while profitability continues to remain healthy at about 30%.
The performance was supported by diversity in products, customers and geography and favourable raw material prices. The integrated operations, order backed sales, and pass on of volatility in raw material prices to customers, will continue to support VOL's business risk parameters.
The company continues to undertake capex for capacity enhancement for introduction of new products and for backward integration; which will enable VOL to improve its operating efficiencies. The financial risk profile metrics continue to remain strong, with a robust networth of Rs 381.81 crore and low gearing of 0.36 time, as on March 31, 2020. Debt protection metrics are strong, with interest cover and net cash accruals to adjusted debt ratios (NCAAD) of 82.81 times and 0.94 time, respectively in fiscal 2020.
The ratings reflect VOL's established market position, moderate working capital cycle, healthy financial risk profile and sound operating efficiencies. These rating strengths are partially offset by VOL's exposure to volatile commodity prices and cyclicality in domestic end-user industries.
The established market position and global competitiveness is also reflected in a healthy operating income of Rs 674.93 crore in fiscal 2020; healthy topline growth at a CAGR of 90% over the last four fiscals due to the inorganic growth by way of acquisitions.
The company has access to working capital limit of Rs 87.5 crore, which is utilized at around Rs 32 crore as of November 2020, thus leaving adequate cushion in bank lines. Net cash accruals are expected to be Rs 120-220 crore per fiscal, which will be more than adequate to cover repayments of Rs 13-27 crore per fiscal, over the medium term. Liquidity is also supported by cash and cash equivalents of Rs 4 crore, free FDs of Rs 3 crore and investments of Rs 25-26 crore as on March 31, 2020. Current ratio was 1.33 times as on March 31, 2020. Company did not avail 6-month moratorium.