KDL Biotech's rating downgraded

The Rs. 20 crore non-convertible debenture issue of KDL Biotech (KDL) has been downgraded to `BB plus' (Double B Plus) from `BBB' (Triple B). The revision in rating factors in the company's tight liquidity position arising from the non-splitting of the company's bank lines post demerger. Coupled with this, the high working capital intensive nature of KDL's semi synthetic penicillin business and the R&D work in biotechnology as well as the low though improving cash generation from operations have translated into a short term funding mismatch.

Going forward, the success of the management's efforts at restructuring the financial and business profile of the company would be key rating sensitivities. KDL is one of the large domestic producers of bulk semi synthetic penicillins like amoxycillin, ampicillin and cloxacillin. KDL is now focusing on biotechnology based R&D which would yield results over a period of time. For the six monthly period ended September 30, 2000, the company reported sales of Rs. 98.6 crores and profit after tax of Rs. 3.17 crores.

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Section  : Business
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