Fitch rates Variety Prints B(ind)

Fitch Ratings said it assigned Variety Prints Pvt Ltd. a national long-term rating of B(ind), along with a national rating of B(ind) to its fund-based cash credit limits of Rs. 57.5 million and a national short-term rating of F4(ind) to its fund-based packing credit limit of Rs. 17.5 million.

The outlook is stable.

The ratings reflect the company's short track record and low scale of operations in dealing with fabric and garments, the fragmented nature of India's garment-manufacturing industry, strained liquidity position and increased working capital requirement, Fitch said.

The ratings also consider the high volatility in cotton prices, which are expected to affect operating margins in the short term, the agency said.

The ratings are further constrained by its weak financial profile, as characterized by high leverage in its first year of operation with a net debt-to-EBITDA ratio of 24.73x, Fitch added.

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