| Balaxi Pharmaceuticals Limited | ||||
| Rating outlook revised to 'Stable'; Rating Reaffirmed | ||||
| 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 revised its outlook on the long-term bank facilities of Balaxi Pharmaceuticals Ltd (BPL; a part of the Balaxi group) to ‘Stable’ from ‘Negative’ while reaffirming the rating at ‘CRISIL BBB+’. Further, CRISIL Ratings has withdrawn its rating on the proposed bank facilities of Rs 15 crore as per the request of the company; this action is in line with the CRISIL Ratings policy on the withdrawal of rating.
The outlook revision factors in the recovery of the business performance in fiscal 2024 post the impact of currency devaluation in the key market, Angola (a country in Central Africa), due to which the group reported loss of Rs 41 crore in the first quarter of fiscal 2024. However, the demand scenario picked up thereafter and the business recovered in the subsequent quarters. The group managed to onboard new institutional customers in Angola and has been successful in the tender business in Latin America (LATAM) markets, which will support the business risk profile over the medium term.
The rating continues to reflect the established market position of the group in Angola and LATAM and expected recovery in the business performance along with the extensive experience of the promoters in the pharmaceuticals industry. These strengths are partially offset by large working capital requirement and exposure to geographical concentration risk in the revenue profile. |
Analytical approach CRISIL Ratings has combined the business and financial risk profiles of BPL along with its wholly owned subsidiary and step-down subsidiaries. This is because all these entities, collectively referred to as Balaxi group, are in the same line of business, have common promoters and strong business and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key rating drivers and detailed description Strengths:
Weaknesses:
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Liquidity: Adequate Bank limit utilisation was around 66% for the 14 months through June 2024. In the absence of any yearly maturing debt over the medium term, the cash accrual projected at more than Rs 35 crore per annum – will aid liquidity. Current ratio stood healthy at 4.04 times and cash and bank balance at around Rs 62 crore as on March 31, 2024. Low gearing and moderate networth will also support financial flexibility. |
Outlook: Stable The Balaxi group will continue to benefit from its established presence and market position in Angola and increasing penetration in LATAM markets. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Balaxi group The group is an Intellectual Property Rights-based pharmaceuticals player supplying to Angola and LATAM markets under the Balaxi brand. The group is also involved in branding and selling construction-related materials in Angola. Mr Ashish Maheshwari and his family members are the promoters.
For the 3 months through June 2024, the group reported consolidated revenue and net profit of Rs. 65.62 crores and Rs. 6.48 crores as against Rs 65.96 crore and loss of Rs 41.34 crore, respectively, respectively, in the corresponding period previous fiscal. |
Key financials Indicators (consolidated)
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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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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Criteria Details
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