CRISIL has reaffirmed 'AA/Stable/A1+' ratings on the bank loan facilities and debt programme of Alembic Pharmaceuticals (APL). The ratings continue to reflect APL's strong position in the domestic formulations market, increasing presence in the international generics market, and healthy financial risk profile marked by low gearing and healthy net cash accruals.

These rating strengths are partially offset by APL's dependence on acute therapeutic segments in the domestic formulations market for most of its revenue, and the company's modest operating profitability.

For arriving at its ratings, CRISIL has combined the financial risk profiles of APL and APL's wholly owned subsidiary Alembic Global Holding SA. Also, APL's intangibles of Rs.1.76 billion have been amortized equally over 10 years starting from 2007-08.

CRISIL believes that APL will maintain strong capital structure over the medium term, driven by healthy cash accruals and moderate capex. The outlook may be revised to 'Positive' if APL improves its operating profitability on a sustainable basis, resulting in larger-than-expected accruals. Conversely, the outlook may be revised to 'Negative' if APL's profitability declines significantly, or if the company undertakes any larger-than-expected debt-funded capex or acquisition programme.

Shares of the company gained Rs 1.1, or 0.46%, to settle at Rs 241. The total volume of shares traded was 38,719 at the BSE (Friday).