Rationale

 For arriving at the ratings, ICRA has taken a consolidated view of Rossari Biotech Limited (RBL), and its subsidiaries enumerated in Annexure II on account of the strong operational, managerial and financial linkages among the entities. The Positive outlook factors in the expectation of a healthy ramp-up in the company’s revenue and profitability, going forward, supported by a steady demand for its products and expansion of the ethoxylation capacity under Unitop Chemicals Private Limited (rated [ICRA]AA- (Positive)/[ICRA]A1+). The company continues to witness healthy demand from its end-user industries, particularly home, personal care and performance chemicals, while it is expanding its distribution network in the textile chemical segment. The capacity expansion under Unitop Chemicals Private Limited includes additional ethoxylation capacity of 30,000 MTPA to meet the growing demand in agrochemicals, home and personal care, oil & gas and the pharma sector. Of this planned addition, 15,000 MTPA was commissioned as of September 2025, while the remaining 15,000 MTPA is expected to be operational by the end of Q3 FY2026. The company has also set up a 20,000-MTPA capacity (commissioned in September 2025) to produce specialty chemicals, including the raw materials used by other Group companies. The ratings continue to factor in the extensive experience of RBL in the specialty chemical manufacturing business spanning around two decades and the established track record of its management. The ratings also consider the strong financial profile of RBL, characterised by healthy profitability and the low reliance on external borrowings, resulting in comfortable gearing and coverage indicators. The ratings also factor in the company’s robust in-house research and development (R&D) facilities, aided by the expertise of Unitop Chemicals Private Limited and Tristar Intermediates Private Limited in complementary chemistries and the synergistic business opportunities through them, enabling cross-selling and expanding the Group’s market reach. The ratings are, however, constrained by competition in the specialty chemicals segment, both from domestic and prominent multinational companies. These competitive pressures impose constraints on the company’s customer dynamics, as they may limit its flexibility in pricing and potentially impact the profitability. Though raw material costs are stable at present, the inherent volatility in prices remains a key monitorable as it directly affects the company’s profitability, even as RBL may be able to partially pass on the cost increase to customers. ICRA notes that the company is undertaking a total capex of Rs. 192 crore. The funding for the entire capex has been tied up and given the healthy internal cash generation, the coverage metrics should remain healthy. However, the Group remains exposed to project execution risks, given the size of the capex. The timely commissioning of the projects within the estimated capital outlay and the subsequent ramp-up of the operational performance will remain a key monitorable, going forward.