ICRA reaffirms ratings of Ultramarine and Pigments at 'A+/A1+'; maintains 'stable? outlook

The agency has also affirmed the company?s short-term rating at '[ICRA] A1+?.

ICRA stated that the reaffirmation of the ratings takes into consideration Ultramarine and Pigments? (UPL) established track record as a manufacturer of ultramarine blue pigments and surfactants. Further, the company has long-standing relationships with its customers. The ratings also factor in a strong financial risk profile and healthy revenues in FY2025.

Further, the capital structure remains comfortable with low debt levels and healthy coverage indicators.

The ratings, however, are constrained by product concentration risk in the pigment segment as the company manufactures majorly a single product? ultramarine blue. While the company is making efforts to develop new products, a successful induction and market development of such products leading to a meaningful diversification of the revenue stream remains to be seen.

The company?s profitability is exposed to the fluctuation in raw material prices. The profitability is further exposed to forex risks because of the significant exports. However, the impact is minimised to an extent by natural hedging as a part of the raw material is imported.

Ultramarine & Pigments has its manufacturing facilities at Ambattur (Chennai), Ranipet (North Arcot, Tamil Nadu) and Naidupeta, Andhra Pradesh. It is one of the major manufacturers of ultramarine blue pigments and surfactants in India. The company also manufactures detergent powder/liquid (under the brand name OOB) and other inorganic pigments in a smaller scale. Besides, it has an ITeS/BPO division with specialisation in content management, publishing, hospital billing services, etc. UPL also earns a small revenue from its windmill division.

The company's consolidated net profit rose 22.07% to Rs 20.19 crore on a 14.85% increase in revenue to Rs 184.38 crore in Q1 FY26 as compared with Q1 FY25.

The scrip rose 0.75% to currently trade at Rs 464 on the BSE.

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