Buy Banswara Syntex: Edelweiss Research

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Buy Banswara Syntex: Edelweiss Research

Broking house, Edelweiss Research is bullish on Banswara Syntex and has recommended buy rating on the stock.

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Banswara Syntex BSE | NSE 01/06/12 Are Mutual Funds betting on Banswara Syntex?

CARE has reaffirmed the PR1+ [PR One Plus] rating assigned to the on-going Short Term Debt (including Commercial Paper) programme of Manaksia Limited (ML) upto Rs.135 crore for a maturity upto three months. Short-Term Debts shall be placed by earmarking fund-based tied-up working capital limit with banks. CARE has also revalidated the CARE AA [Double A] rating assigned to the proposed Non-Convertible Debenture (NCD) issue of ML upto Rs.25 crore. The NCDs are proposed to be repaid in four equal half-yearly installments, after a moratorium of two and a half years.

The ratings draw strength from ML's long and satisfactory track record, experience of promoters, strong position in most of the product categories, modest growth rate of major user industries, high degree of vertical integration leading to cost effectiveness, good client portfolio alongwith buy-back arrangements with major customers and comfortable financial position. The ratings are however, constrained by decline in sales of mosquito coils and metal products, increase in major input prices, significant amount of exposure to group companies and possible competition in packaging industry from alternate materials like plastic containers. 

ML, a Kolkata based company, is engaged in manufacturing a large number of products, major being, aluminum sheets, steel sheets, mosquito coils and stands, ROPP caps, crown closures and metal containers at 14 manufacturing locations across the country. Its clientele includes companies like Reckitt Benckiser India Ltd. (RBIL), Hindusthan Coca Cola Ltd. (HCCL), UB Group, Shaw Wallace, Mohan Meakins and Jyothi Laboratories (JL). ML has buy-back arrangements for selling its mosquito coils with RBIL and for plastic closures with HCCL.

In FY'06, ML earned a PBILDT and PAT (after deferred taxation) of Rs.72 crore and Rs.27 crore on net sales (net of inter-segment revenues) of Rs.859 crore. Financial parameters of ML have generally been comfortable. Interest coverage at 2.31 in FY'06 and overall gearing ratio at 1.18 as on March 31, 2006 were satisfactory. Current ratio remained adequate at 1.24 as on March 31, 2006. Working results of ML during the half year ended September 30, 2006 were also comfortable.

Sourced From: Careratings