Fitch rates Budge Budge loans BB-(ind)

Fitch Ratings said it assigned Budge Budge Refineries Ltd. a national long-term rating of BB-(ind), along with its outstanding Rs. 91.2 million long-term loans of BB-(ind), sanctioned Rs. 50 million fund-based limits of BB-(ind) and sanctioned Rs. 803 million non-fund-based limits of F4(ind).

The outlook is stable.

The ratings reflect its inherently low profit margins, as well as the high competitive intensity and fragmentation in the domestic edible oils industry, Fitch said.

The ratings also reflect volatility in the global edible oil prices, threat of substitution from cheaper edible oils and moderate market position of the company in the relatively high margin retail segment, the agency said.

The ratings favorably factor in the positive demand outlook with India being traditionally deficit in edible oil, location advantages arising from the company's proximity to the storage unit and the Budge Budge Port, as well as the experience of its promoters in the edible oils business, Fitch said.

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