Care Rating Nepal has assigned Double B and A four rating to A.S.T. Private Limited

Wed, Jun 3, 2020 1:49 PM on Credit Rating, Latest,
Care Ratin...

CARE Ratings Nepal Limited (CRNL) has reaffirmed rating of ‘CARE-NP BB’ assigned to the long-term bank facilities and ‘CARE-NP A4’ assigned to  the  short-term  bank  facilities  of  A.S.T.  Private  Limited (AST).

The  ratings  assigned  to  the  bank  facilities  of  AST  are  constrained  by  impact  of  COVID-19 on  the business of the company, working capital intensive nature of its operations leading to high utilization of working capital limits, exposure to volatile interest rates, price volatility risk on traded commodities and exposure  to  foreign  exchange  fluctuation  risk.  The  ratings  also  factor  in  fragmented  industry  with competition  from  both  national  and  international  players.  The  ratings,  however,  derive  strength  from moderate track record and experienced promoters in the related field, improvement in profitability of the company  despite  decline  in  revenue  during  FY19(audited,  refers  to  12  months  period  ended  mid-July 2019),  moderate  debt  service  coverage  indicators  and  diversified  distribution  network  with  locational advantage. Ability to profitably scale up the operations of the company, effective management of working capital with improvement in solvency position are the key rating sensitivities.

Key Rating Weakness

  • Impact of COVID-19 on the business of the company 
  • Working capital intensive nature of operations 
  • Exposure to volatile interest rates
  • Price volatility risk on traded commodities and foreign exchange fluctuation risk
  • Fragmented industry with competition from both domestic and international players

Key Rating Strength

  • Moderate track record and experienced promoters in the related field
  • Improvement in profitability of the company despite decline in revenue during FY19 
  • Moderate debt service coverage indicators
  • Diversified distribution network with locational advantage

About the Company

A.S.T. Private Limited (AST) was registered as a private limited company on December 23, 2011, which was  earlier  registered  as  a  proprietorship  firm  and  operated  since  November  30,  2005  in  the  name  of Allied  Shruti  Traders. The  company is  promoted  by individual  businessmen of  Nepal with  registered office situated  in Birgunj, Parsa. AST is  involved  in import and  trading of chemicals  and  industrial raw materials  from  various  countries  for  end-user  industries such  as  bakery  &  confectionary,  snacks  & noodles, juices & beverages, dairy, paints & textiles etc.

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