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Crisil upgrades Meghmani Finechem rating to AA-/Stable

Financial analyst and stock market specialist Andres Garza Muniz, shows the individual behavior of a company's shares in Monterrey, Nuevo Leon, Mexico, on September 28, 2021. - Across the globe, baby-faced investment gurus in their twenties are building huge followings on YouTube, Instagram and TikTok by offering tips on how people can better manage their finances. (Photo by Julio Cesar AGUILAR / AFP) (AFP)Premium
Financial analyst and stock market specialist Andres Garza Muniz, shows the individual behavior of a company's shares in Monterrey, Nuevo Leon, Mexico, on September 28, 2021. - Across the globe, baby-faced investment gurus in their twenties are building huge followings on YouTube, Instagram and TikTok by offering tips on how people can better manage their finances. (Photo by Julio Cesar AGUILAR / AFP) (AFP)

  • The rationale for Crisil upgrade is steady revenue growth of Meghmani Finechem, healthy operating margin, good demand prospect and improving financial risk profile

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Ratings agency Crisil has upgraded the rating of Meghmani Finechem Ltd to Crisil AA-/Stable with the rationale being steady revenue growth, healthy operating margin, good demand prospect and improving financial risk profile.

"Crisil has revised the outlook on Meghmani Finechem Limited’s long term bank facilities from ‘Crisil A+/Positive’ to ‘CRISIL AA-/Stable’," the agency said in a statement.

The rating upgrade of the leading Chlor-alkali products and its value-added derivatives manufacturer resulted in the stock of the company surging by 5% on Thursday.

Meghmani Finechem shares closed 5% higher at 736.10 apiece on NSE. The scrip has surged by a massive 81.10% since the start of 2021 (Year-to-Date) period.

Crisil has also factored in healthy capacity utilisation rates across all product segments and faster than estimated ramp-up of newly commissioned hydrogen peroxide facility to revise the rating.

It also took note of the strong revenue growth with healthy operating margins because of the impressive capacity utilisation of over 80% in all segments during the first half of fiscal 2022.

The rating agency expects Meghmani Finechem to post year-on-year (YoY) revenue growth of 35-40 per cent for the ongoing fiscal while maintaining 27-28% operating margins.

“We are quite honored by this recognition by Crisil. This upgrade reaffirms the company’s vision to strategically grow with a good balance sheet. The expansion plan we are working on will significantly add to the revenue without compromising on Return on Capital Employed (ROCE). The company is moving up the specialty value chain with special focus on products which are heavily imported currently. We have integrated processes and are working continuously to use technology to further bring efficiency to our operations and maximize value for the shareholders," Meghmani Finechem’s Chairman and Managing Director Maulik Patel said.

"MFL's continued stellar performance reflects the resilience of our business model, the high trust and reliability that our customers share with us continue to drive us and help us reach new heights. We continue to remain strong in our pursuit towards service to customers, growth, sustainability and profitability in the future as well," he added.

Meghmani Finechem Limited (MFL), incorporated in 2007, is a leading manufacturer of Chlor-alkali products and value-added derivatives. The company is India’s 4th largest manufacturer of Caustic Soda, Chlorine and Hydrogen and a leading manufacturer of Caustic Potash Chloromethanes and Hydrogen Peroxide.

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