Brickwork Ratings has assigned BWR BB rating for the bank loan facilities of INR 8.50 crores of Parmarth Steel & Alloys Pvt Limited.

BWR has principally relied upon the provisional financial results up to FY 2012, projected financials of FY 2013 of PSAPL, publicly available information and information/clarification provided by the company management.

The rating has factored, inter alia, the promoters experience in the steel sector, the team of professionally qualified individuals& ability of the Company to increase its scale of operations and improve its profit margins along with efficient management of working capital. The rating is constrained by intense competition, fluctuating turnover with low profitability margins, small scale of operations and volatility associated with raw material prices. The ability of the company to meet its sales projections, profitability and other financial projections for FY 2013 and its sustainability in a highly fragmented and competitive steel industry shall remain the key sensitivities.

Parmarth Steel & Alloys Pvt Limited, a private limited company was incorporated in 1996 to manufacture MS Ingots and the by product of Runners & Risers. The company started manufacturing activities in 1997 at 7th km Nagina Road in Bijnor, with a financial assistance of INR 8,400,000 from Uttar Pradesh Finance Corporation, Moradabad, which has been repaid within stipulated time. During the last 16 years PSAPL has established as a quality producer of MS Ingots.

The company is led by Mr Raj Kamal Agarwal & his nephew Mr Shikhar Agarwal who are the directors of PSAPL with 15 years of experience in steel industry.

Source - Brickwork Ratings

(www.steelguru.com)