ICRA Nepal assigns LBB and A4 rating to long term and short term loans of Dugar Spices and Food Products; Key financial indicators included

ICRA Nepal has assigned a long-term rating of [ICRANP]LBB (pronounced ICRA NP L Double B) to the NPR 244.63 million long-term loans of Dugar Spices & Food Products Private Limited (DSPL or the company). ICRA Nepal has also assigned a short-term rating of [ICRANP]A4 (pronounced ICRA NP A four) to the NPR 545 million fund-based limits and the NPR 191.20 million non-fund-based limits of DSPL.

Credit strengths

Adequate track record of being an established brand and experienced promoters

Improving sales revenue and profitability indicators

Established sales channel

Credit challenges

High gearing levels, however, adequate coverage indicators owing to good OPBDITA levels

Tight liquidity position

Limited product diversification

Other external factors like changes in Government regulations

About the company

Dugar Spices & Food Products Private Limited (DSPL), incorporated in 1999, is a manufacturing unit producing spices, Bhujiya and extruded snacks. The major products are sold under the brand name Century. DSPL is the largest domestic player in the spices, Bhujiya and extruded snacks segment. 

DSPL is a family-owned business of Mr. Moti Lal Dugar, a Biratnagar-based businessman and the chairman of DSPL. As of now, DSPL is the largest business unit of Mr. Dugar, who also owns an operational boutique hotel¹, an under-construction commercial complex (Centurion) and two other manufacturing units, all located in the Biratnagar region of Province-1. Mr. Dugar is also the current Member of Parliament in the Central Government of Nepal. 

Key financial indicators 

 Source: Company data 

  Instrument Details 

Source: ICRA Nepal