ICRA has reaffirmed the [ICRA]A1+ (pronounced ICRA A one plus) rating assigned to the Rs. 15.0 crore Commercial Paper/ Short Term Debt programme of Unichem Laboratories Limited (Unichem). The rating reaffirmation takes into account Unichem‘s established presence in the domestic formulation business with sizeable exposure towards the fast growing and relatively high margin chronic therapeutic segments. The company‘s financial profile remains healthy and is characterised by strong and sustained cash accruals and minimal reliance on debt thereby resulting in strong credit matrices. The rating also factors in the company‘s strong manufacturing capabilities with majority of their facilities being US FDA approved thereby providing significant scope to scale up presence in the regulated markets. However, the profitability of the consolidated entity continues to be hampered by the weak performance of Unichem‘s subsidiaries especially Niche Generics Limited (NGL) wherein the revival has not happened as expected given the ongoing austerity measures by European Governments aimed at reducing healthcare spending, including cost-controls for various drugs. Additionally, the company has also been facing declining profitability and slower growth relative to the market in the domestic business due to series of restructuring initiatives which included sales force realignment, launching of a second tier of brands and shifting of distribution channel; however, having completed these initiatives, the company now expects to gradually start accruing the benefits in the near term.