Fitch affirms Jindal Poly Films

Fitch Ratings said it affirmed Jindal Poly Films Ltd.'s national long-term issuer rating at A+(ind).

The outlook is stable.

The agency said the rating reflects Jindal's leading domestic and global positions in the bi-axially-oriented polyester films industry, its dominant domestic position in the bi-axially oriented polypropylene films industry, its conservative capital structure and comfortable debt protection measures and the success enjoyed by the company in the export market, which has been helped by the fact that it does not face anti-dumping duties in Europe.

Fitch's key rating concerns emanate from the supply-led cyclical nature of the industry and strong raw material prices. The company has recorded substantial reduction in its operating profit margin over the last two years due to commissioning of fresh capacities in India. The company is also subject to typical project implementation risks, given its ongoing capex program, which are moderated by its past experience in implementing such projects, the agency said.

The company's debt-to-EBITDA ratio was 2.14x for 2006.

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