| Indian Toners and Developers Limited | ||||||
| Rating outlook revised to 'Stable'; Ratings reaffirmed | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
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| This Rating Rationale is published solely to update the bank-wise facility details as provided by the rated entity; other sections are same as the previous Rating Rationale dated June 29, 2020. |
Detailed Rationale CRISIL Ratings has revised its rating outlook on the long term bank facilities of Indian Toners and Developers Limited (ITDL) to 'Stable' from 'Negative’ and reaffirmed the rating at 'CRISIL BBB+’. The short term rating has been reaffirmed at 'CRISIL A2+'.
The outlook revision reflects the improvement in operating performance of ITDL since the second quarter of fiscal 2021, with easing of lockdown restrictions and the provisional anti-dumping duty levied on August 10, 2020. Revenue and operating margin stood at Rs 25 crore and 20%, respectively, for the third quarter of fiscal 2021, vis-à-vis Rs 22 crore and 13%, reported respectively in the corresponding period last fiscal.
CRISIL Ratings has factored in the notification issued by the Ministry of Finance on March 5, 2021, about the anti-dumping duty levied on black toner imports in powder form, originating from China, Malaysia and Taiwan for five years. Imposition of this duty should support sustenance of revenue and margin for ITDL, going forward.
The ratings continue to reflect the established market position and strong business risk profile of ITDL. The company is likely to maintain a strong financial risk profile, supported by adequate liquidity and a debt-free balance sheet. These strengths are partially offset by the modest scale of operations and exposure to intense competition from low-priced imported toners. |
Analytical Approach For arriving at the ratings, CRISIL Ratings has considered the standalone business and financial risk profiles of ITDL. |
Key Rating Drivers & Detailed Description Strengths
Weaknesses
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Liquidity: Adequate Liquidity should remain adequate, with cash, bank balance, investments and cash equivalent together estimated at Rs 92 crore as on March 31, 2021. Expected net cash accrual of Rs 15-20 crore should suffice to cover the incremental working capital requirement in the absence of any debt obligation or significant capital expenditure (capex) plan. Cash credit limit of Rs 5 crore was not utilised during the 12 months through April 2021. |
Outlook Stable CRISIL Ratings believes the ITDL group will continue to benefit from its established position in the domestic toner replacement market. The group's financial risk profile should remain healthy, supported by nil debt, strong liquidity and negligible capex plans. |
Rating Sensitivity Factors Upward factors:
Downward factors:
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About the Company ITDL manufactures toners for photocopiers, laser printers, digital machines and multi-function printers, and caters to the replacement market, under the Supremo brand. The company was set up in 1990, by the promoter and current chairman and managing director, Mr Sushil Jain. Its manufacturing unit in Rampur, Uttar Pradesh, has an installed production capacity of 1200 tonne per annum (TPA). In 2008, ITDL formed a 51% subsidiary, ITDL Imagetec Ltd (Imagetec), with toner production capacity of 2,400 TPA in Sitarganj, Uttarakhand. Imagetec started commercial operations in April 2009, and enjoys a tax holiday for the first 10 years of operations.
In fiscal 2011, the group started catering to the international market through the Rampur plant under ITDL and to the domestic market through the Sitarganj plant under Imagetec. In 2017, the company amalgamated Imagetec and four other investment companies with itself, under the orders of the National Company Law Tribunal (NCLT), Allahabad, dated May 9, 2017, and NCLT, New Delhi, dated July 26, 2017.
Revenue stood at Rs 59 crore with a net profit of Rs 10.2 crore for the nine months ended December 31, 2020, compared to Rs 70 crore and Rs 9.4 crore, respectively, in the corresponding period last fiscal. |
Key Financial Indicators
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
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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 | |||
| Facility | Name of Lender | Amount (Rs.Crore) | Rating |
| Cash Credit | State Bank of India | 0.5 | CRISIL BBB+/Stable |
| Letter of Credit | State Bank of India | 8.5 | CRISIL A2+ |
| Proposed Long Term Bank Loan Facility | Not Applicable | 31 | CRISIL BBB+/Stable |
This Annexure has been updated on 2-Sep-2021 in line with the lender-wise facility details as on 17-Aug-2021 received from the rated entity.
Criteria Details
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