Fine Organic soars 6%, hits new high after ICRA upgrades credit rating

Shares of Fine Organic Industries soared 6 per cent to hit a new high of Rs 2,235 on the BSE on Monday in an otherwise weak market after ICRA upgraded its credit ratings of the company. The stock of specialty chemicals surpassed its previous high of Rs 2,186 touched on November 14, 2019.

ICRA upgraded the long-term rating of the company to AA- from A+ and reaffirmed the short term rating at A1+.

“The upgrade in long-term rating of Fine Organic Industries favourably factors in the healthy improvement in scale of operations and cash accruals in FY2019 and H1 FY2020 which are expected to increase further driven by the ramp up in the capacity utilisation of the newly commissioned capacity at Ambernath (Mumbai) and the positive demand outlook for the company’s products in the domestic as well as export markets,” ICRA said in a rating rationale.

The company has a diversified product profile that finds application in various end-user industries, which reduces the demand risks associated with a single product or industry to some extent. The rating agency also favourably considers the company’s strong process improvement and product innovation capabilities supported by a strong in-house research and development facility.

The Stable outlook on the [ICRA]AA- rating reflects ICRA’s opinion that Fine Organic Industries will continue to benefit from its long track record of operations, positive demand outlook for its products, healthy financial risk profile and commitment to conservative financial policies, it added.

At 02:17 pm, the stock was trading 5 per cent higher at Rs 2,220 on the BSE, as compared to 0.77 per cent decline in the S&P BSE Sensex. A combined 31,472 equity shares changed hands on the counter on the NSE and BSE so far.