Rating Advisory

November 22, 2021 | Mumbai Adarsh BirmechaOriginal Template123

Amrutanjan Health Care Limited

Advisory as on November 22, 2021

This rating advisory is provided in relation to the rating of Amrutanjan Health Care Limited

The key rating sensitivity factors for the rating include:

Upward Factors
* Revenue growth of over 20% in fiscal 2021 and increase in operating margin to 16% leading to better cash accrual.
* Geographical diversification in revenue profile.

Downward factors
* Decline in operating profitability to less than 9% and revenues by 25%.
* Any large debt funded capex adversely impacting financial risk profile.

CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing monitoring and review.
Accordingly, it seeks regular updates from companies on business and financial performance. CRISIL Ratings is yet
to receive adequate information f rom Amrutanjan Health Care Limited (AHCL) to enable it to undertake a rating review.
CRISIL Ratings is taking all possible efforts to get the rated entity to cooperate with its rating process for enabling it to
carry out the rating review.

CRISIL Ratings views information availability risk as a key f actor in its assessment of credit risk. (Please refer to
CRISIL Ratings’ criteria available at the f ollowing link,
https://www.crisil.com/content/dam/crisil/criteria_methodology/basics -of -ratings/assessing-inf ormation-adequacy-
risk.pdf)

If AHCL continues to delay the provisioning of information required by CRISIL Ratings to undertake a rating review
then, in accordance with circulars SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 dt Nov 1, 2016, SEBI/HO/MIRSD/
MIRSD4/ CIR/ P/ 2017/ 71 dt June 30, 2017 and SEBI/HO/MIRSD/CRADT/CIR/P/2020/2 dt January 3, 2020 issued
by Securities and Exchange Board of India, CRISIL Ratings will carry out the review based on best available
inf ormation and issue a press release.

About the Company

Set up in 1893 by the late Mr K Nageswara Rao Pantulu, the Chennai-based AHCL produces ayurvedic OTC healthcare
products. Operations are managed by chairman and managing director, Mr Sambhu Prasad. The company's products
primarily f ocus on pain relief , congestion management, and personal hygiene under the brands, Kick out Pain, Relief, and
Purity, respectively. AHCL also sells beverages under the brand Fruitnik, and sanitary napkins under the brand, Comfy.

AHCL is listed on the Bombay Stock Exchange and National Stock Exchange.

Please note: This advisory should not be construed as a rating reaffirmation.

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Please note: This advisory should not be construed as a rating reaffirmation.

 Rating Rationale
December 02, 2020 | Mumbai

Amrutanjan Health Care Limited

Ratings Reaffirmed

Rating Action
Total Bank Loan Facilities Rated Rs.20 Crore
Long Term Rating CRISIL A-/Stable (Reaffirmed)
Short Term Rating CRISIL A1 (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities

Detailed Rationale
CRISIL has reaffirmed its ratings on the bank facilities of Amrutanjan Health Care Limited (AHCL) at 'CRISIL
A-/Stable/CRISIL A1'.

The ratings reflects strong brand call and established market position in the pain relief segment with a wide distribution
network, and a strong financial risk profile. These rating strengths are partially offset by susceptibility of the operating margin
to volatility in raw material prices and to intense competition in its other segments.
Key Rating Drivers & Detailed Description
Strengths:
* Strong brand recall in the pain management segment and established distribution network: AHCL has been
manufacturing ayurvedic balm for pain management since 1893, and is currently managed by the third-generation of
promoters. Because of its long track record in the industry, it has an established market position and strong brand recall in
the pain management segment. The established distribution network is being leveraged to expand into new geographies
and product categories. All the segments majorly including OTC, pain balm, beverages, sanitary pads and others are
contributing to the overall growth of the company.

* Strong financial risk profile: Financial risk profile should remain healthy, backed by steady cash accrual, a comfortable
capital structure and strong debt protection metrics. Networth stood at Rs 198.87 crore as on March 31, 2020.Debt
protection metrics were healthy, indicated by interest coverage of 92.5 times in fiscal 2020.Total Outstanding liability to Total
Networth stood strong at 0.25 times as on March 31.2020.The metrics should remain strong, supported by stable cash
accrual.

Weakness:
* Vulnerability to fluctuations in raw material prices: The operating margin has been volatile at 12-18.4% in the five
fiscals through 2020, mainly on account of fluctuation in the price of key ingredient, menthol. Prices and supply of raw
materials directly affect realisation and any sharp change in input prices with absence of a similar rise in realisations can
dent profitability significantly.

* Limited pricing flexibility because of intense competition: The scale of operations has remained moderate despite
more than 10 decades in the industry. In pain and congestion management, the company continues to face competition from
large established brands, limiting its pricing flexibility. Additionally, there are challenges in other segments such as
beverages, largely on account of intense competition from local and established brands.
Liquidity Strong
Liquidity remains strong supported by steady accruals and nil utilization of bank limits. The company is likely to report cash
accruals of over Rs.26 crores in the medium term, against no repayment obligations. Bank limit utilization remain nil during
the past fifteen months, ended September 2020. Further, an efficient working capital management and adequate cash and
bank balances will continue to support the liquidity for the company.
Outlook: Stable
CRISIL believes ACHL's business risk profile will remain supported over the medium term by its established regional market
position in pain management products.

Rating Sensitivity Factors

Upward Factors
* Revenue growth of over 20% in fiscal 2021 and increase in operating margin to 16% leading to better cash accrual.
* Geographical diversification in revenue profile.

Downward factors
* Decline in operating profitability to less than 9% and revenues by 25%.
* Any large debt funded capex adversely impacting financial risk profile.
About the Company
Set up in 1893 by the late Mr K Nageswara Rao Pantulu, the Chennai-based AHCL produces ayurvedic OTC healthcare
products. Operations are managed by chairman and managing director, Mr Sambhu Prasad. The company's products
primarily focus on pain relief, congestion management, and personal hygiene under the brands, Kick out Pain, Relief, and
Purity, respectively. AHCL also sells beverages under the brand Fruitnik, and sanitary napkins under the brand, Comfy.

AHCL is listed on the Bombay Stock Exchange and National Stock Exchange.
Key Financial Indicators
As on/for the period ended March 31 Unit 2020 2019
Operating income Rs crore 261.88 253.65
Reported profit after tax Rs crore 25.02 24.45
PAT margins % 9.58 9.66
Adjusted Debt/Adjusted Networth Times 0.00 0.00
Interest coverage Times 92.48 158.55

Any other information: Not applicable

Note on complexity levels of the rated instrument:

CRISIL complexity levels are assigned to various types of financial instruments and are included (where applicable) in the
Annexure -- Details of Instrument in this Rating Rationale. For more details on the CRISIL complexity levels, please
visit www.crisil.com/complexity-levels.

Annexure - Details of Instrument(s)

Name of Date of Coupon Maturity Issue Size Complexity Rating Assigned with
ISIN
Instrument Allotment Rate (%) Date (Rs.Crore) Level Outlook

Secured
Overdraft
NA NA NA NA 2.0 NA CRISIL A-/Stable
against term
deposits
NA Cash Credit NA NA NA 8.0 NA CRISIL A-/Stable
NA Overdraft NA NA NA 2.0 NA CRISIL A1
Proposed Long
NA Term Bank Loan NA NA NA 8.0 NA CRISIL A-/Stable
Facility

Annexure - Rating History for last 3 Years

Start of
Current 2020 (History) 2019 2018 2017
2017
Outstanding
Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating
Amount
CRISIL CRISIL CRISIL
Fund-based CRISIL
A-/Stable/ A-/Stable/ A-/Stable/ CRISIL
Bank LT/ST 20.00 24-12-19 12-09-18 24-08-17 A-/Positive/
CRISIL CRISIL CRISIL A-/Positive
Facilities CRISIL A1
A1 A1 A1
Non Fund-
based Bank LT/ST -- -- -- -- -- CRISIL A1
Facilities
All amounts are in Rs.Cr.

Annexure - Details of various bank facilities

Current facilities Previous facilities
Facility Amount Rating Facility Amount Rating
 (Rs.Crore) (Rs.Crore)
CRISIL CRISIL
Cash Credit 8 Cash Credit 8
A-/Stable A-/Stable
Overdraft 2 CRISIL A1 Overdraft 2 CRISIL A1
Proposed Long Term CRISIL Proposed Long Term CRISIL
8 8
Bank Loan Facility A-/Stable Bank Loan Facility A-/Stable
Secured Overdraft CRISIL Secured Overdraft CRISIL
2 2
against term deposits A-/Stable against term deposits A-/Stable
Total 20 -- Total 20 --

Links to related criteria

CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
Rating Criteria for the Pharmaceutical Industry
CRISILs Criteria for rating short term debt

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CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is
registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of
independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range
of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially
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securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates
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We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken
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investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any
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