Brickwork Ratings withdraws the long-term rating, and reaffirms the short-term ratings, removes from the Issuer Not Cooperating category, and simultaneously withdraws the short-term ratings for the Bank Loan Facilities of Rs. 25.00 Crs. of HIL (India) Ltd. (erstwhile Hindustan Insecticides Ltd.)
ParticularsFacilities/Instruments** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (13 Mar 2024) |
Present | ||
Fund Based | 250.00 | 0.00 | Long Term |
BWR B+ /Stable
Continues to be in ISSUER NOT COOPERATING* category/Downgraded |
Withdrawal |
Non Fund Based | 50.00 | 25.00 | Short Term |
BWR A4
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed |
BWR A4
removal from ISSUER NOT COOPERATING* category/Reaffirmed and Withdrawn |
Grand Total | 300.00 | 25.00 | (Rupees Twenty Five Crores Only) |
Brickwork Ratings (BWR) had last rated the bank loan facilities of Rs. 300 Crs on 13 March 2024 by downgrading the long-term rating to BWR B+/Stable/A4 under the ISSUER NOT COOPERATING* category. Based on the company’s request for bank loan rating withdrawal, receipt of No objection certificate from banker, availability of the financial and other operational information, receipt of banker’s feedback, and submission of the latest NDS for the last three months, BWR reaffirms, removes the ratings from the Issuer Not Cooperating category and simultaneously withdraws the ratings for the Bank Loan Facilities of Rs. 25.00 Crs. of HIL (India) Ltd with immediate effect.
KEY COVENANTS OF THE INSTRUMENT / FACILITY RATEDThe terms of the sanction include standard covenants normally stipulated for such facilities.
Credit Strengths:
HIL (India) Ltd, formerly known as Hindustan Insecticides Limited, is a Government of India enterprise established in 1954. The company continues to receive consistent financial support from the Government of India. HIL is the sole manufacturer of DDT and the only Central Public Sector Enterprise (CPSE) operating in the Public Health and Crop Protection sectors in India. Additionally, the company is one of the five national-level seed agencies in India, supplying its products to state governments.
HIL is the exclusive supplier of DDT to the National Vector Borne Disease Control Programme under the Ministry of Health. Initially focused on insecticides, the company has since diversified into agrochemicals and is the only public sector enterprise in the pesticide industry. Its product range includes insecticides, herbicides, weedicides, and fungicides. HIL exports to several countries, including the Netherlands, UK, UAE, South Korea, and more, with international acceptance. Its prestigious clients include the Ministry of Chemicals & Fertilizers, Ministry of Health & Family Welfare, Steel Authority of India, Indian Oil, Bharat Electronics, Coal India, and Haryana Tourism.
The operating profit margin and the return on capital employed (ROCE) is negative, suggesting poor profitability and inefficient use of capital. Additionally, the interest service coverage ratio is weak, implying difficulty in meeting interest obligations. The company's high conversion cycle of 576 days indicates inefficiencies in turning inventory and receivables into cash. Furthermore, the debt-to-equity ratio is extremely high at 9.16 times, signaling excessive leverage and a higher financial risk.
The company's average collection period has remained consistently high, reaching 727 days as of March 31, 2024, compared to 677 days in the previous year. This delay in payment is primarily due to the company selling its products mainly to government bodies and state governments, which often result in delayed payments.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria below.
RATING SENSITIVITIES
The ratings of the company are sensitive to improvement in its revenues, gross and net profit margins, and working capital cycle besides improvement in other financial parameters.
Positive: The ratings may be upgraded if the company is able to significantly improve its revenues, net worth, debt protection metrics, and overall gearing coupled with the improvement in other financial parameters.
Negative: The ratings may be downgraded if there is any fall in the company's revenue and earnings and large variations in the audited financials v/s projected financials.
LIQUIDITY INDICATORS - Adequate
The net cash accrual is Rs. 6.20 cr in FY24. The company has no CPLTD in FY24. The current ratio remains comfortable at 2.44 times. The tangible networth of the company is Rs. 55.81 cr. Further, the cash and bank balance is Rs. 118.42 cr. The conversion cycle stood at 576 days.
COMPANY's / FIRM's PROFILEMacro Economic Indicator | Sector | Industry | Basic Industry |
---|---|---|---|
Commodities | Chemicals | Fertilizers & Agrochemicals | Pesticides & Agrochemicals |
HIL (INDIA) LTD formerly known as Hindustan Insecticide Limited is a Government of India Enterprise. The Company is under the administrative control of the Department of Chemicals and Petrochemicals, under Ministry of Chemicals and Fertilizers. HIL is the only manufacturer of Dichlorodiphenyltrichloroethane (DDT) and also the only central public sector enterprises (CPSE) operating in the Public Health and Crop Protection segments in India. The company has gradually diversified into agrochemicals and is presently the sole public sector enterprise in the pesticides field. The product range of the company includes Insecticides, Herbicides, Weedicides and Fungicides etc. The company exports its agro-products to Netherlands, UK, Jamaica, UAE, Manila, South Korea, Belgium, Guatemala, France, Germany, Argentina, Ethiopia, Egypt, Spain, etc. and its products are well-accepted internationally. HIL has a reputed clientele viz., Ministry of Chemicals & Fertilizers, Ministry of Health & Family Welfare, Ministry of Agriculture, Steel Authority of India Limited, Indian Oil Corporation, Bharat Electronics Limited., Coal India Limited, Haryana Tourism, etc.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 21 - 22 (Audited - Annual) |
FY 22 - 23 (Audited - Annual) |
FY 23 - 24 (Audited - Annual) |
---|---|---|---|---|
Operating Revenue | Rs.Crs. | 354.40 | 200.55 | 197.55 |
EBITDA | Rs.Crs. | -50.40 | -36.44 | -67.52 |
PAT | Rs.Crs. | 2.21 | -68.70 | 4.50 |
Tangible Net Worth | Rs.Crs. | 118.23 | 50.54 | 55.81 |
Total Debt / Tangible Net Worth | Times | 1.86 | 4.67 | 7.15 |
Current Ratio | Times | 1.40 | 1.09 | 2.44 |
Not Applicable
RATING HISTORY FOR THE PREVIOUS THREE YEARS(including withdrawal and suspended)Name of Instrument (NCD/Bank Loan /Non- Fund Based facilitates/ Commercial Paper etc.) | Current Rating (2025) | 2024 | 2023 | 2022 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 0.00 |
Withdrawal
|
13Mar2024 |
BWR B+ Stable
(Continues to be in ISSUER NOT COOPERATING* category/Downgraded) |
09Mar2023 |
BWR BB-Stable
(Downgrade/ISSUER NOT COOPERATING*) |
18Feb2022 |
BWR BB Stable
(Upgrade) |
Non Fund Based | ST | 25.00 |
BWR A4
(removal from ISSUER NOT COOPERATING* category/Reaffirmed and Withdrawn) |
13Mar2024 |
BWR A4
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed) |
09Mar2023 |
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*) |
18Feb2022 |
BWR A4
(Upgrade) |
Grand Total | 25.00 | (Rupees Twenty Five Crores Only) |
Analytical Contacts | |
---|---|
Sejal Santosh Jaiswal Ratings Analyst sejal.sj@brickworkratings.com |
Hari Kishan Yadav Associate Director - Ratings hari.ky@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | Complexity of the Instrument |
---|---|---|---|---|---|---|
1 | Union Bank of India | Term LoanSanctioned | _ | _ | 0.00 | Simple## |
2 | Union Bank of India | Cash CreditSanctioned | _ | _ | 0.00 | Simple## |
3 | Union Bank of India | Letter of CreditSanctioned | _ | 25.00 | 25.00 | Simple## |
Total | 0.00 | 25.00 | 25.00 | |||
TOTAL (Rupees Twenty Five Crores Only) |
## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.
Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate (%) | Maturity Date | ISIN Particulars | Complexity of the Instrument |
---|---|---|---|---|---|---|
Nil | Nil | Nil | Nil | Nil | Nil | Nil |
Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
---|---|---|---|
Nil | Nil | Nil | Nil |
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