Fitch affirms Ace Calderys

Fitch Rating said it affirmed Ace Calderys Ltd.'s national long-term rating at A+(ind), its Rs. 200 million cash credit limit at A+(ind)/F1+(ind) and its Rs. 200 million fund-based working capital limit and Rs. 500 million non-fund-based facilities at F1+(ind).

The outlook is stable.

The agency said the ratings reflect the company's position as India's second-largest refractory manufacturer, stable revenue streams driven by replacement demand for refractories from the steel and cement sectors, consistently positive free cash flows, comfortable liquidity position and the relationships of the company's sponsors with France's Imerys, as Fitch expects Ace Calderys to derive potential synergies through better sourcing arrangements for raw materials and more efficient manufacturing technologies.

Risks to the rating exist from volatility in the prices of raw materials, primarily of alumina, Fitch said, and higher competition coupled with lower import duties on refractory products could expose the company to a certain amount of pricing pressures over the medium term.

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