Fitch: Ballarpur view negative

Fitch Ratings said it revised the outlook on Ballarpur Industries Ltd. to negative from stable and affirmed its long-term foreign-currency issuer default rating at BB- and its national long-term rating and Rs. 33.5 billion debenture program at Fitch AA-(ind).

The agency also revised the outlook on subsidiaries Ballarpur International Graphic Paper Holdings and Ballarpur Industries Graphic Paper Products Ltd. to negative from stable, affirmed the former's long-term foreign-currency issuer default rating at BB- and affirmed the latter's national long-term rating at Fitch AA-(ind).

The outlook revision reflects Fitch's view that Ballarpur Industries' net financial leverage will have likely increased to about 5.3 times for the year ended June from 4.3 times in 2011. The agency said its view is driven by the decline in operating EBIDTA margins to 16.9% from 19.7% due to delays in pulp integration plans, exposing the company to volatile global pulp prices, and an increase in other input costs and dollar-denominated debt on account of rupee depreciation.

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