ICRA has assigned “A3” rating for Nikhil Adhesives’ (NAL) short term demand loan worth Rs 3.00 crore (which comprises of Rs 1.33 crore enhanced amount and reclassified proposed enhancement amount rated earlier).The ratings continue to reflect NAL’s established presence in the paints and emulsions industry, its reputed client base and locational advantage arising from proximity to ports and end-user industries.
The ratings also factors in its satisfactory financial risk profile with improving capital structure. However the ratings are constrained by the moderate profitability margins and coverage indicators and vulnerability of margins to raw material price and forex fluctuations. The ratings are also constrained by high competitive pressures in the industry with strong competition from unorganized (large presence) as well as organized players which would continue to put pressure on the margins going forward.
NAL, a listed company with the Bombay Stock Exchange, is engaged in the manufacturing of various types of industrial and consumer chemical products like adhesives, binders, thickeners and construction chemicals. It is also engaged in trading of chemicals. NAL’s marketing offices are at Chennai, Ahmedabad, Delhi, Jaipur and Ghaziabad with stocking facilities by way of warehouses. It has two manufacturing plants located at Dahanu and Silvassa.
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