CRISIL has reaffirmed its ratings of 'CRISIL BBB-/Stable/CRISIL A3' on the bank facilities of Speciality Industrial Polymers and Coatings Private Limited (SIPCPL).

 
The company’s revenue declined significantly in fiscal 2020 to Rs 119 crore from Rs 152 crore in fiscal 2019 because of decrease in realization by around 14% due to decrease in price of raw material which is majorly passed-on to its customers and a decline in volume by around 9%. However, EBITDA margin remained healthy at 9.2% in fiscal 2020 in-line with fiscal 2019.

SIPCPL performance is expected to moderate in FY21 because of the ongoing pandemic. In H1FY21, SIPCPL generated revenue of Rs 37 crore at EBITDA margin of 7.2%. SIPCPL capacity utilization however, has sprung back to average of 70% as on Sept 2020 with healthy demand after a steep decline in Q1FY21. The company is expected to report operating income at about Rs 90-100 crore while maintaining steady profitability for fiscal 2021.

 
The ratings continue to reflect the extensive experience of the promoter and the company's established position in the acrylic polymer and opaque polymer industry, and its above-average financial risk profile. These strengths are partially offset by customer concentration in revenue.

CRISIL believes SIPCPL will continue to benefit from the extensive experience of the promoter and growth of decorative paint industry in India.