CARE Nepal assigns BBB- and A3 to long term and short term bank facilities of Bhagwati Steel Industries

CARE Ratings Nepal Ltd. (CRNL) has assigned Rating of „CARE-NP BBB-‟ to the long term bank facilities and „CARE-NP A3‟ to the short term bank facilities of Bhagawati Steel Industries Private Limited (BSPL).

Key Rating Strengths

• Established and long track record of operations along with experienced management team in the related field  
• Moderate operational and financial profile characterized by healthy growth in sales and profitability during FY19
• Moderate gearing levels and debt service coverage indicators of the company 
• Diverse product range catering to wide spectrum of industries and established marketing setup
• Established brand with strong customer base
• Demand of steels products in the country

Key Rating Weaknesses

• Raw material price volatility risk and foreign exchange fluctuation risk 
• Working capital intensive nature of operations
• Exposure to volatile interest rates
• Presence in highly fragmented and competitive nature of steel industry 

About the Company

Bhagawati Steel Industries Private Limited (BSPL) is a private limited company incorporated on January 10, 1991 for manufacturing Pipes and Sheets, having plant in Chhatapipra, Bara, Nepal. Currently, the total installed capacity of the plant is 85,500 Metric Tons Per Annum (MTPA) which was increased from 59,000 MTPA during January, 2019.

Brief financial performance during the last 3 years ending FY19 is as follows:

(Rs. In Million)

 Details of the Facilities rated

Source: careratingsnepal.com