Rationale

 The rating reaffirmation of Amines and Plasticizers Limited (APL, the company) considers APL's long operating track record and the technical expertise of the promoters in the chemical manufacturing segment along with a healthy financial risk profile, marked by comfortable capital structure and debt coverage indicators. The ratings also continue to take into account the company's strong position in the domestic market in manufacturing chemical products like methyl diethanolamine (MDEA), ethyl mono ethanolamine (EMEA) and N-methyl morpholine oxide (NMMO). APL's profitability, however, remains vulnerable to the volatility in raw material prices and utility costs, as seen in FY2022 when the profit margin witnessed some moderation even as the revenue grew. The supplier concentration risk also remains high for the company as it is dependent on a sole supplier for the sourcing of a major raw material i.e. ethylene oxide (EO). Further, the ratings also take into consideration the vulnerability of profitability to foreign exchange fluctuations as exports contribute to around 40-50% of the total revenues. However, the imports provide a natural hedge to the company to some extent. The Stable outlook takes into account the company's established position in the ethalomine and morpholine segments, which coupled with its healthy liquidity profile, should support the company's credit profile in the medium term, despite its susceptibility to the volatility in raw material prices and utility costs.