Fitch affirms Arch Pharmalabs

Fitch Ratings said it affirmed Arch Pharmalabs Ltd.'s commercial paper/short-term debt program for an enhanced amount of Rs.600 million at F1(ind).

The rating reflects the company's strong revenue growth, proven ability to realize value from its past acquisitions, its focus on continuously evolving its product portfolio by entering new segments and its focus on developing its research and development capabilities, Fitch said.

The rating is constrained by the company's negative cash flow from operations - a result of its high working capital levels, the agency said, also reflected in the near-full utilization of its funded working capital limits. The rating is primarily constrained by the debt-led nature of its capital expenditure and acquisitions over the past few years, Fitch added.

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