Fitch upgrades Biopac India

Fitch Ratings said it upgraded Biopac India Corp. Ltd.'s national long-term rating to B(ind) from B-(ind).

The outlook is stable.

The agency also upgraded the company's bank loans to B(ind) from B-(ind).

Fitch said the upgrades primarily reflect stabilization of the company's operations, after it restructured its business following a December 2004 plant fire.

Ratings are constrained by the relatively low value addition undertaken by the company, its vulnerability to raw material price volatility and increased competition due to low barriers of entry, which may result in margin pressure, the agency said.

Ratings also factor in volatility in the foreign exchange rate, although the company follows a conservative foreign exchange policy and has been able to manage the risks, the agency noted.

Ratings also reflect benefits from packaging and hygiene standards for the industry and the growing acceptability of polystyrene as a food-grade plastic, Fitch said.

In fiscal 2010, Biopac reported a total adjusted debt-to-EBITDAR ratio of 1.8x.

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