Care Scales Down Kirloskar Fin, Five Others

Credit Analysis & Research Ltd (Care) has downgraded six companies, and withdrawn the rating of Chemox Securities Ltd. The six companies downgraded by Care are Kirloskar Investments & Finance Ltd, Sugal & Damani Finlease Ltd, Tecil Chemicals & Hydro Power, Chemox Laboratories Ltd, Magnum Intermediates Ltd, and Brisk Capital Market Services Ltd.

Tecil Chemicals and Hydro Power Ltd had its secured bonds downgraded to BB from BBB. According to Care, Tecil's total income fell sharply by 46 per cent for fiscal year 1997, due to extensive power cuts in Kerala and a prolonged strike at its plant. Also, the company is facing competition from imports from China and Romania.

 

Kirloskar Investments & Finance Ltd's on-going fixed deposit programme was downgraded to A from A+. During fiscal year 1997, the company's total income grew by four per cent while PAT declined by 31 per cent due to a sharp rise in interest cost. The company has also faced deterioration in recovery performance and asset quality.

Sugal & Damani Finlease Ltd had its fixed deposit programme downgraded to BBB from BBB+. While the company continued to focus on lease and hire purchase, it faced a drop in disbursements due to resource constraints and capital employed increased only marginally during the year. Profitability has deteriorated significantly due to increase in operating expenses.

Brisk Capital Market Services Ltd was downgraded to D from BB following the recent attachment of its properties by the Ministry of Finance in connection with the trial of offences relating to the securities scam.

Magnum Intermediates Ltd's non-convertible debenture was downgraded to D from BB+. The company is facing a large build-up of both inventories and receivables, exerting considerable pressure on liquidity and the company has been delaying payments to various lenders.

Chemox Laboratories Limited's NCD was also downgraded to D from BB+. The company's operations were affected by the closure of its plant for two months during fiscal year 1997 on account of pollution related problems. It has also been facing severe liquidity problems on account of its on-going expansion projects and increased working capital requirements which has delayed its debt servicing.

Care has withdrawn the BBB rating assigned to the fixed deposit programme of Chemox Securities Ltd following the discontinuance of the programme by the company.

Meanwhile, Crisil has assigned AA rating to the proposed Rs 25 crore non-convertible debenture issue by NIIT Ltd. "The rating indicates a high safety of timely payment of interest and principal," Crisil said in a note.

It also reaffirmed FAA+ rating on fixed deposits programme of NIIT. "The ratings reflect NIIT's position as a major player in the information technology services industry and its well established brandname," it added.

The agency has reaffirmed "A-" rating assigned to the Rs 12 crore NCD issue of Kamat Hotels (India) Ltd while assigning an "a-" to the Rs 10 crore NCD issue of KHIL indicating adequate safety in timely payment of the interest and principal. The Rs 80 crore commercial paper programme of ICI India Ltd has been assigned "P1+" reflecting the company's strong market position.

Ipca Laboratories Ltd's Rs 6 crore CP has been given a "P1+" rating indicating that its meeting of financial obligations was very strong.

The agency has also rated the Rs 40 crore NCD programme of Excel Industries "AA-" indicating timely payment of interest and principal. The Rs 20 crore cpp has been rated "P1+" while the FD programme has been given "FAA" indicating it was strong in its repayments.