ICRA Assigns Long-Term Rating of ICRA B to Poonam Polymers Private Limited

Strategic Insights -

ICRA has assigned a long-term rating of ICRA B to the Rs. 10.0 crore fund-based bank facilities of Poonam Polymers Private Limited (PPPL), a company engaged in the distribution and trading of BOPP films, polyester films, copper wires, cables, aluminum wires, and paper. The rating is constrained by PPPL's low profit margins due to the trading nature of its business, intense competition in the industry, and vulnerability of its profitability to commodity price risk.

Key Takeaways:

  • ICRA's rating of ICRA B is based on PPPL's low profit margins, high gearing, and low coverage indicators.
  • The company's ability to scale up volumes traded while improving margins will be a key rating sensitivity.
  • PPPL's promoter, Mr. Amit Singhal, has a track record of over 17 years in trading and distribution of BOPP films and polyester films through his proprietorship firm, Shiv Trading.
  • The company is an authorized distributor of companies like Max India Limited, Polyplex Limited, Jindal Polyflims, etc.
  • PPPL reported an operating income of Rs. 70.10 crore and a profit after tax of Rs. 0.20 crore in 2013-14, as against an operating income of Rs. 22.62 crore and a profit after tax of Rs. 0.12 crore in the previous year.

Statistics:

  • Rs. 10.0 crore: the amount of fund-based bank facilities assigned a long-term rating of ICRA B.
  • Rs. 70.10 crore: operating income of PPPL in 2013-14.
  • Rs. 22.62 crore: operating income of PPPL in the previous year.
  • Rs. 0.20 crore: profit after tax of PPPL in 2013-14.
  • Rs. 0.12 crore: profit after tax of PPPL in the previous year.

Sources:

  • ICRA's rating report on Poonam Polymers Private Limited.
  • Company profile of Poonam Polymers Private Limited.
  • ICRA's rating methodology.