Mumbai, July 5, 2024 — Panama Petrochem Limited (PPL), a leading manufacturer in the petrochemical sector, announced today the reaffirmation of its credit ratings by CARE Ratings Limited for both its long-term and short-term bank facilities. This reaffirmation underscores the company’s robust financial health and consistent operational performance.
Key Highlights:
- Long-term Bank Facilities: Reaffirmed at CARE A+; Stable
- Short-term Bank Facilities: Reaffirmed at CARE A1+
In a detailed press release issued on July 4, 2024, CARE Ratings highlighted the key factors contributing to these ratings. The company’s revenue for the fiscal year 2024 was reported at ₹2,356.74 crore, marking a 5% growth from the previous year. Despite a slight dip in operating margins to 10.80%, PPL continues to demonstrate strong financial stability and growth potential.
Financial Performance and Rating Drivers
PPL’s reaffirmed ratings reflect its:
- Consistent Revenue Growth: A steady increase in sales volume contributed to the revenue growth from ₹2,248.72 crore in FY23 to ₹2,356.74 crore in FY24.
- Diverse Product Portfolio: With over 80 product variants catering to multiple industries, PPL has solidified its market position.
- Strong Customer Relationships: Long-standing relationships with reputed customers like Reliance Industries Ltd and Dabur underline PPL’s market reliability.
- Robust Financial Profile: The company boasts a strong capital structure with no term debt and a low overall gearing ratio of 0.18x as of March 31, 2024.
Liquidity and Risk Management
PPL maintains a strong liquidity position, marked by healthy cash accruals and minimal utilization of fund-based facilities. The company’s working capital cycle was consistent at 87 days in FY24, ensuring smooth operational efficiency.
To mitigate risks associated with volatility in base oil prices and foreign exchange rates, PPL has implemented strategic measures. These include passing on cost increases to customers and hedging foreign exchange exposures through forward contracts.
Future Outlook
CARE Ratings has provided a stable outlook for PPL, anticipating continued benefits from its established market position, product diversity, and robust customer relationships. The company’s plans for capacity expansion, funded through internal accruals, further highlight its growth trajectory.
Management Insight
Gayatri Sharma, Company Secretary & Compliance Officer at Panama Petrochem Limited, expressed satisfaction with the reaffirmed ratings, stating, “These ratings are a testament to our consistent operational performance and strong financial health. We remain committed to maintaining our growth momentum and delivering value to our stakeholders.”
Panama Petrochem Limited’s continued focus on innovation, efficiency, and strategic risk management positions it favorably within the competitive petrochemical industry.
Note:This post was written and edited by Arin Chaturvedi, based on their expertise and research. It is intended for informational purposes only. It does not constitute legal advice or Investment Advice. We welcome your feedback and questions on this content. Please feel free to contact us.