| Aculife Healthcare Private Limited | ||||||
| Ratings reaffirmed at 'CRISIL A/Stable/CRISIL A1' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its ‘CRISIL A/Stable/CRISIL A1’ ratings on the bank facilities of Aculife Healthcare Pvt Ltd (Aculife).
The ratings continue to reflect the established market position of Aculife in the parenteral business and its healthy operating profitability, along with adequate backing from promoters of the Nirma group.
Revenue rose 6% in fiscal 2023 to Rs 532 crore, driven by strong growth in domestic sales, which compensated for lower-than-expected exports. The company has recorded about Rs 380 crore of sales in the first seven months of fiscal 2024, with a significant pick-up in exports. The company plans to expand its portfolio by adding several new products early next fiscal, which should ensure a healthy growth trajectory over the medium term.
While operating margin moderated to around 12% in fiscal 2023, due to high input cost and low exports, it has recovered to over 20% during fiscal 2024. Additions to the product portfolio as well as growing exports could support the gradual rise in margin over the medium term.
The financial risk profile remains comfortable marked by a moderate gearing of 1.23 times as of March 31, 2023. Though the company has no external long-term debt as on date, it had raised funds via preference shares and inter-corporate deposits from group companies to fund the ongoing capital expenditure (capex) of which the ICDs have been repaid. Interest coverage and net cash accrual to total debt ratios were healthy at 10.3 times and 0.16 time, respectively, for fiscal 2023.
The above-mentioned strengths are partially offset by exposure to intense competition and large working capital requirement. |
Analytical Approach
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity is aided by moderate bank limit utilisation and adequate cash accrual. Expected cash accrual of over Rs 90 crore per fiscal should comfortably cover capex over the medium term. Bank limit of Rs 145 crore was moderately utilised at 70% on an average during the 12 months through August 2023. CRISIL Ratings also believes that being a part of the Nirma group, Aculife would receive need-based support, adding to its financial flexibility. The group could evaluate inorganic growth plans in the pharma vertical, whose funding and impact on Aculife’s capital structure would need to be monitored closely. |
Outlook: Stable CRISIL Ratings believes Aculife will maintain its established position in the parenteral segment, aided by sustained growth in revenue and healthy operating margin. The company is likely to maintain its comfortable financial risk profile, supported by a healthy capital structure and debt protection metrics. |
Rating Sensitivity factors Upward factors
Downward factors
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About the Company Aculife was incorporated in 2014, by demerging the healthcare division (Nirlife) of Nirma Ltd ('CRISIL AA/Stable/CRISIL A1+'). Nirlife was founded by acquiring a parenteral manufacturing company with a track record of two decades.
Aculife offers over 600 products in multiple markets and therapeutic areas, including anesthesia, critical care, anti-infectives, renal care, infusion therapy and parenteral nutrition. It offers injectables in various forms such as glass and plastic bottles, vials, ampoules, and pre-filled syringes. The products are marketed under Flexivent and OneUse brands.
The customer base primarily comprises nursing homes, private and corporate hospitals and government institutions. Aculife has an established market position and a large product portfolio in India and markets such as Latin America, the Middle East, Commonwealth of Independent States (CIS), Africa and Asia. |
Key financial indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
@Fully interchangeable with non-fund-based limits *Fully interchangeable with bank guarantee |
Annexure - List of Entities Consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||
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