Rationale

 The ratings assigned to the bank lines of Amines and Plasticizers Limited (APL/the company) has been placed on watch with negative implications, given the current disruption in the sea freight routes across West Asia. APL derives a healthy revenue share from the West Asian nations and the ongoing conflict has forced the company to scale down its exports, which in turn has brought down its production levels. Crude oil prices have also risen quite sharply because of the geopolitical tensions, increasing the input costs for APL and may impact its profitability in the near to medium term. Additionally, the sharp increase in freight costs amid constrained availability of cargo ships has impacted export revenues; going forward, the easing of the cargo movement will remain a key monitorable. ICRA will continue to monitor the impact of the sharp increase in raw material prices as well as utility costs for APL on its credit profile. At present, as informed by the management, APL does not have any balance outstanding from its customers in West Asia. The ratings continue to factor in APL’s long and established track record of operations and the technical expertise of the promoters in the chemical manufacturing segment. The ratings also factor in the company’s healthy financial risk profile, characterised by stable cash accruals along with comfortable capitalisation and debt coverage indicators. The ratings continue to take into account the company’s strong position in the domestic market in manufacturing chemical products like ethanolamine’s, alkyl alkanolamines, morpholine derivatives and gas treating solvents. APL’s profitability remained stable in FY2025, supported by heathy volume growth which kept the OPBDITA steady at Rs. 69.0 crore in FY2025 against Rs. 69.1 crore in FY2024. In 9M FY2026, the production and sales volumes were affected due to lower availability of a key raw material, ethylene oxide (EO). As a result, the revenue and OPBDITA moderated with the OPM% at 8.7% in 9M FY2026 vis-à-vis 10.4% in FY2025. The supplier concentration risk also remains high for the company as it is dependent on Reliance Industries Limited {RIL, rated [ICRA]AAA (Stable)/[ICRA]A1+} for the sourcing of EO. The ratings also take into consideration the vulnerability of profitability to foreign exchange fluctuations as exports contribute to 40-50% of the total revenues. However, the imports provide a natural hedge to the company to a large extent. The ratings are also vulnerable to the volatility in utility costs as well as the use of piped natural gas (PNG) to meet the company’s energy requirements. The PNG prices are linked to imported liquified natural www.icra.in Sensitivity Label : Public Page |2 gas (LNG) prices, which can witness significant volatility, and the company may not be able to pass on these costs to its customers, as was seen in FY2022 and FY2023 when the operating margins had fallen to around 7.1%. For the last detailed rating rationale please refer to the link here.