India Ratings and Research (Ind-Ra) has upgraded Chemplast Sanmar Ltd's (CSL) Long-Term Issuer Rating to 'IND A+' from 'IND A-'. The Outlook is Positive.

Ind-Ra continues to take a consolidated view of CSL and its wholly-owned subsidiary, Chemplast Cuddalore Vinyls Limited (CCVL). CSL has provided a corporate guarantee towards loans of Rs 1,076.63 million availed by CCVL as of FY21. Moreover, CCVL has a significant scale and profitability, making the business strategically important to CSL's consolidated profile.

The upgrade and the positive outlook reflect a substantial improvement in CSL's consolidated credit profile after the completion of the initial public offering (IPO) in August 2021, healthy profitability over FY21-9MFY22, backed by strong polyvinyl chloride (PVC) prices, and Ind-Ra's expectation of an improvement in CSL's business profile over the medium term.

This will be on the back of a consolidation of its market leading position in the paste PVC business, where the company plans to enhance the capacity, and a strong performance in other business segments.