Rating agency CRISIL has revised the outlook on Meghmani Finechem Limited’s long term bank facilities from ‘CRISIL A+/Positive’ to ‘CRISIL AA-/Stable’. 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 per cent on Thursday.
Steady revenue growth, healthy operating margin, good demand prospect and improving financial risk profile have been the key driving factors behind the upgrade. Also, CRISIL 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 per cent 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 per cent 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.