Care Rating 27th Dec ’23:
Integrated operations offering diversified product mix.: BRL has a leading market position in many technical and intermediate products, including Lambda Cyhalothrin Technical, Metaphenoxy Benzaldehyde, Metribuzine Technical, Thiamethoxam (Insecticides) and Fipronil (Insecticides) among others and further added new products in past year, namely, Fluxametamide, Tolfenpyrad Technical, Diuron Technical, etc., which contributed around sales of ₹102.05 crore in FY23 and ₹98.88 crore in H1FY24. Though there is a product concentration risk as the top 10 products of BRL accounts for around 81.13% of the total sales of BRL in FY23 (PY: around 79.08%) and around 66% of total sales in H1FY24 (PY: around 81%). Technical accounted for 79.94% of the total sales in FY23 (PY: 78.12%), intermediates accounted for 17.78% (PY: 18.98%), and formulation accounted for 1.22% (PY: 2.09%). The group derives cost advantage from the integrated operations through lower dependence on imports of technical, which is the key input for manufacturing of formulations.
Long standing relationship with reputed customer base : The company supplies its products in both locally as well as overseas locations and has a long-standing relationship with reputed
customers, including NISSEI Corporation, Syngenta Crop, Biostadt India, Sumitomo Chemical Company among others. However, BRL is exposed to moderate client concentration risk, as its top 10 customers accounted for ₹793.84 crore in FY23 (around 63.41% of total operating income [TOI]) as compared with ₹722.79 crore in FY22 (around 54.97% of TOI). BRL also has long established association with many reputed Japanese players and has a 30:70 joint venture (JV) with Nissan Chemical Corporation (NCC), which started commercial production from March 2023 and has reported total income of ₹69.90 crore in H1FY24 with PBILDT margin of around 37%.
Comfortable financial risk profile The capital structure of the company remains strong marked by zero long-term debt and healthy net worth base of ₹901.19 crore as on March 31, 2023 (PY: ₹771.61 crore) while the total debt of the company reduced substantially to ₹36.84 crore from ₹179.93 crore as on March 31, 2022. The overall gearing stood comfortable at 0.04x as on March 31, 2023 (PY: 0.23x) and other debt coverage indicators were also healthy including total debt to gross cash accruals (GCA) and interest coverage ratio of 0.24x (PY: 0.89x) and 38.81x (PY: 40.99x), respectively.
| Subscribe To Our Free Newsletter |
