ncr ENGINEERING

National Credit Ratings Limited

RATINGS (MARCH 2011) ENTITY RATING

STEELTECH INDUSTRIES LTD. (SIL)
Long Term Short Term Date of Rating Declaration
A (Single A) ST-3 01/03/2011
BANK LOAN RATINGS
Outstanding
Limit
Nature of Facility (TK. In Rating
(TK. In Million)
Million)
Non Funded Facilities
210.00 ---- BLR A+
(L/C, BG)
Funded Facility ( TR, Bial,
335.70 315.40 BLR A+
HPSM))
* Outstanding loan facilities as on January 31, 2011

RATING RATIONALE
The above rating reflects SIL’s satisfactory track record, satisfactory capacity
utilization, experienced management team, efficient production process, good
profit margin and standard leverage ratio. The ratings are however influenced by
modest financial profile characterized by low coverage ratio, long working capital
cycle, moderate liquidity ratio and the volatile nature of the industry.

FINANCIAL DATA
TK (mln) ASSESSMENT
ƒ The business performance of Steeltech Industries Ltd has improved significantly
June-10 Jun-09
in FY 2010, as the actual production has increased after the new production lines
Total Assets 512.76 321.68 came in full operation. The gross revenue and EBITDA has increased substantially
Equity 179.12 106.28 during FY 2010. In spite of a sales growth of 139.64% in FY2010 relative to the
Net Turnover 436.18 339.38 previous year, the gross margin remained steady at 18.20% because of the
Net Income 22.15 4.13 rising cost of imported raw materials. The company reported net income of TK
EBITDA 79.48 31.24 31.32 Million in FY2010 against net turnover of TK 436.18 Million.
ROE % 21.24 13.67 ƒ The company primarily depends on short term borrowings to manage the working
Interest Coverage capital requirements and maintain the inventory level. The Cash Cycle improves a
2.82 2.85 little in FY2010 relative to the previous year though it is still longer.
(X)
Net Debt/ (Net ƒ SIL’s interest coverage ratio has improved slightly in FY2010 than the previous
61.02 61.07
Debt + Equity) % fiscal year but its debt service coverage ratio has decreased in FY2010 compared
to FY2009 because of more increase in short term borrowings than adjusted
quick assets. Despite increase in current assets the adjusted quick ratio has
ANALYSTS deteriorated in FY2010 relative to FY2009 due to increase in short term liability.
ƒ SIL maintains a standard 60:40 debt -equity ratio. Any material increase in
Mohammad Saifur Abedin Ome leveraging would impact the financial profile of the company, which would have
+0088-02-9359878 negative rating implication.
ome@ncrbd.com
PROFILE
Md. Hasan Shahriar Chowdhury
+0088-02-9359878 ƒ SIL, incorporated as a private Limited Company in February 2003 and
shahriar@ncrbd.com commencing commercial operations in November 2003, is mainly involved in
manufacturing and marketing stainless steel pipes. Other than manufacturing
stainless steel pipes, SIL also produces copper bars, pipes and tubes and various
rubber products for various industries. The allied concerns of SIL include 1) Kai
Bangladesh Aluminum Ltd. 2) Altech Aluminum Industries Ltd. 3) Multipanels Ltd.
4) Tissuetech Industries Ltd. 5) Papertech industries Ltd. 7) paragon Ceramics
Industries Ltd. The company’s is owned and managed by a 11 members BoD.
The management is headed by the Managing Director; Mr. Abbasi Adam Ali who
is also one of the sponsor Directors of the company.

DISCLAIMER
NCR has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not
guaranteed. NCR shall owe no liability whatsoever to any loss or damage caused by or resulting from any error in such information. None of the information in this
document may be copied or otherwise reproduced, stored or disseminated in whole or in part in any form or by any means whatsoever by any person without NCR’s written
consent. Our reports and ratings constitute opinions, not recommendations to buy or to sell.
Tel: + 88-02-9359878 Fax: +88-02-9332769 Website: www.ncrbd.com
In preparing this report NCR has used the Bank Loan Rating Methodology which is available at our website: www.ncrbd.com