"The revision in the outlook reflects improvement in Kopran group's business risk profile expected over the medium term. Improved demand from export market, addition of new geographies and new products under development, should result in higher revenue and profitability over the medium term," Crisil said in a detailed rationale.
The manufacturing operations were not significantly impacted by lockdown and other measures taken by central and state governments to contain the spread of the Covid-19, since the company operates in the essential segment. "Group's revenue improved by 43.6 per cent in first quarter of fiscal 2021 (year-on-year) and net profits grew by 238 per cent; sustenance of revenue growth and profitability shall remain key monitorable," it said.
"The ratings continue to reflect the extensive experience of promoters in the pharmaceutical industry, and the above-average financial risk profile despite debt funded capex in the past. These strengths are partially offset by the working capital-intensive operations, and susceptibility to volatile input prices," it added.
Meanwhile, Kopran in 2019-20 annual report said the new products like Nitroxiline and Ticagrelor have been commercialised. Atenolol DMF has been approved by the US Food and Drug Administration (USFDA) and commercial supplies are commencing to various customers. The company has received approval for Pregabalin from the EU-GMP- and will be able to market the API in Europe. Company has filed USDMF for Azithromycin and Pregabalin.
"The company is expanding its API and Formulation portfolio and would be starting its sale of Atenelol in US market during 2020-21. It expects to grow and improve its margin with new products, cost efficiencies and higher production. The company continues to pursue automation and expansion for growth for formulations and in its subsidiary Kopran Research Laboratories Ltd manufacturing APIs", it said.