CRISIL “AAA” for BASF India’s Rs 800mn NCD issue

CRISIL’s ratings on BASF India Limited’s (BASF’s) debt continue to reflect the company’s diversified business risk profile and robust financial risk profile, and the continued support of its parent, BASF AG. These rating strengths are, however, partly tempered by BASF’s exposure to the risks inherent in the agrochemicals business.

BASF’s revenue base is spread across business segments such as agrochemicals, performance products, and plastics. The business caters to a variety of user industries, mainly textile, paper, and construction. This revenue diversity cushions BASF from the impact of downturns in any segment. BASF receives strong technological and product support from its parent, BASF AG (rated ‘AA-/Negative/A-1+’ by Standard & Poor’s). BASF’s financial risk profile is marked by low gearing and comfortable debt protection measures. The debt protection measures are robust with interest coverage of 14 times and net cash accruals to total debt ratio of 9 times for the year ended March 31, 2006. The company’s capital structure is expected to remain favourable over the medium term.

These ratings are based on a consolidated view of BASF India Limited and its 100 per cent subsidiary, BASF Polyurethanes India Limited.

Outlook
The stable outlook reflects CRISIL’s expectation that BASF will maintain strong performance in its major business segments and that it will continue to derive support from its parent, BASF AG. 

Sourced From: CRISIL Limited