The agency has also affirmed the company’s short-term rating at '[ICRA] A2’.

ICRA stated that the reaffirmation of ratings of NGL Fine-Chem (NGL) factors in the company’s established operational track record, the extensive experience of its management in the animal health active pharmaceutical ingredients (API) segment, its diversified geographical presence in domestic and international markets and its well-established client base built over the years.

Also, NGL continues to maintain a strong market share for its top three APIs (diminazene, clorsulon and buparvaquone), supported by a competitive cost proposition since it is partly backward integrated for basic chemicals.

Going forward, topline growth is expected tobe supported by improvement in realisations, penetration in new geographies and expansion of itsproduct line.

The ratings, however, remain constrained by the moderate scale of operations and high working capital intensity of NGL’s business, stemming from receivables and an elevated inventory holding cycle.

Also, the company’s profitability remains vulnerable to volatility in raw material prices, as demonstrated in FY2023.

Moreover, given the nature of short-term contracts, the company's operating profitability remains exposed to the movements in the raw materials prices that cannot be passed onto customers.

NGL Fine-Chem is a veterinary API manufacturer and its products are used in the animal health care industry. NGL had acquired a 100% stake in Macrotech Polychem (MPPL) in May 2019. MPPL manufactures pharmaceutical intermediates and serves as the backward integrated unit for the company.

The scrip had shed 0.10% to end at Rs 1089 on the BSE today.