FINANCE

The Company endeavours to maintain an optimal capital structure from time to time; however, during the year the Company has generated cash profit out of its operations thereby maintaining debt at a lower level. During the year under review, the total debt of the Company declined given the scheduled repayments & prepayments made and better working capital management.

Reduction in total debt resulted in lower interest costs for the Company. Depreciation increased due to change in estimated useful life of certain Property, Plant and Equipment. The Company has a dedicated team monitoring the exposure of foreign exchange and dynamically minimizing the risk arising therefrom. Due to judicious management, the Company has been able to manage its cash flow position in an efficient manner. On a Standalone basis, Total Debt: Equity as on March 31, 2021 reduced to Nil compared to 0.14 times as on March 31, 2020.

The Company is well placed in the industry, delivering quality guided by a robust product mix. Thus, on the back of steady performance over the years, both ICRA and CRISIL has upgraded long term credit rating, from AA- to AA while the short term rating of the Company remains at the highest level at A1+. This is primarily owing to the Company’s sustainable business performance, commercial viability across most segments of its products, diversified product portfolio, constant innovation, and efficient operations.
In case of the Company’s wholly owned subsidiary, Deepak Phenolics Limited (‘DPL’), ICRA has upgraded the long term credit rating by two notches i.e. from “ICRA A/Stable” to “ICRA AA-/Stable” and also upgraded short term credit rating from “ICRA A1” to “ICRA A1+” which is the highest rating in short term category.

During the year, DPL has pre-paid substantial part of its borrowing apart from honouring committed repayments. Pursuant to this, consolidated Net Debt / Equity ratio is 0.15x as of March 31, 2021 compared to 0.67x as of March 31, 2020.