Fitch rates Plastolene Polymers, Roto India loans F4(ind)

Fitch Ratings said it assigned a national short-term rating of F4(ind) to Plastolene Polymers Private Ltd. and Roto India Enterprise.

Ratings reflect the fragmented nature of India's plastic industry resulting in intense competition, limited bargaining power and exposure to volatility in the prices of raw materials and traded goods, according to the agency.

This is partially mitigated by the company's ability to pass on costs, the agency noted.

Plastolene has a weak financial profile, characterized by high net leverage with a net debt-to-EBITDA ratio of 11.4x. Roto's net debt-to-EBITDA ratio in fiscal 2009 was 2.05x. Roto reported negative net-free cash flows, due mainly to an increase in operating working capital requirements, the agency said.

The companies belong to the Kolkata-based Sonthalia group.

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