The Hindu Business Line : Crisil downgrades Glenmark Pharma’s ratings

NEW DELHI: Rating agency Crisil on Friday said that Glenmark Pharmaceuticals' rising debts have strained its financial health and downgraded the working capital loan and cash credit ratings of the drug maker.

“The downgrade reflects Glenmark's strained financial risk profile due to a sharp increase in debt levels as a result of a sizeable increase in working capital requirements in both Glenmark and its subsidiaries,'' the rating agency said in a release.

The downgrade also reflects the company's higher-than-expected capital expenditure (capex) and outlays on brand acquisitions. Further it said that the rating revision also reflects the refinancing risk posed by high reliance on short-term borrowings to fund the increase in working capital requirements.

The working capital demand loan and cash credit ratings for Glenmark have been downgraded to A+/Negative, which is a lower investment-grade rating but with a negative outlook.

Earlier, Crisil had assigned AA-/Stable ratings on both the debt facilities, which meant relatively better investment grade with a stable outlook. These ratings are for a Rs 145 crore working capital demand loan and a Rs 25 crore cash credit. Crisil has also assigned an A+/Negative rating to Glenmark's Rs 400 crore long-term loans. - PTI

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