Kodak India's rating retained

The AA plus rating assigned to Rs. 10 crore non-convertible debenture issue of Kodak India (KIL) has been reaffirmed by Crisil. The P1 plus rating assigned to the Rs. 50 crore commercial paper programme of the company has also been reaffirmed.

The re-affirmations reflect the sustained improvement in the company's financial risk profile as reflected by its improving profitability, favourable gearing and interest coverage ratios and anticipated sustenance of the favourable cash flow protection measures in future.

The ratings continue to reflect the company's established market position especially in the consumer imaging and retail segment of the domestic photographic industry, its strong brand equity and distribution set-up and improving operational efficiencies on account of its enhanced value addition through in-house finishing.

The ratings continue to factor the demonstrated financial, management and operational support to KIL from its final parent, Eastman Kodak Company, U.S (rated A plus/negative/A minus 1 by Standard and Poor's). The ratings are, however, constrained by the company's limited pricing flexibility on account of intense competition from other established players in the domestic photographic industry and the relatively high degree of import content in its raw material mix, making it susceptible to exchange rate fluctuations.

Kodak India, a subsidiary of Kodak of the U.K., is a part of the Eastman Kodak Company (EKC) group and is engaged in finishing and marketing of photographic products such as films, paper, chemicals and cameras. KIL's operations are divided into five strategic business units namely consumer imaging, professional and print imaging, professional motion imaging, health imaging and digital imaging - with consumer imaging comprises around 60 per cent of its total revenues. In the recent past, KIL has been able to consolidate its market position in the consumer imaging segment due to its enhanced focus on the retail segment backed by aggressive marketing, increasing penetration levels and sustained support from the parent. The company reported a profit after tax of Rs. 24.92 crores on a net sales of Rs. 558.45 crores for the year ended December 31, 1999. During the first nine months of FY 2000, it reported a PAT of Rs. 29.93 crores on a net sales of Rs. 493.04 crores.

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Section  : Business
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