CRISIL upholds ratings of TCG Lifesciences.
BANKING AND CREDIT NEWS-4 March 2010-CRISIL upholds ratings of TCG Lifesciences(C)1994-2010 M2 COMMUNICATIONS http://www.m2.com
4 March 2010 - Indian credit rating agency CRISIL upheld the ratings of BBB+ with a "stable" outlook and of P2 to various bank facilities of local contract medical research services provider TCG Lifesciences Ltd.
The ratings continue to reflect the company's established market position and healthy operating efficiencies in the contract research business, its high revenue visibility, and comfortable financial risk profile marked by moderate capital structure and healthy debt protection measures. These strengths are partially offset by its exposure to risks relating to the customer concentration in its revenues, the weak profitability of acquired subsidiaries, and support to weak group companies.
CRISIL believes that TCG Lifesciences will continue to benefit from its established market position, and will achieve significant growth in revenues given the increase in outsourcing by global pharmaceutical majors; the acquisition of the SQL LIMS division from Life Technologies Corporation will also be a major revenue driver.
The agency may revise the outlook to "positive" if TCG Lifesciences successfully integrates its newly acquired businesses, thereby improving its profitability and business risk profile. Conversely, it may revise it to "negative" if the company undertakes larger-than-expected debt-funded capital expenditure programmes/acquisitions, increases its exposure to contract research programmes with risk-sharing business models, or fails to generate synergies between the newly acquired business and the existing laboratory information management system (LIMS) business. Any material weakening in TCG Lifesciences' financial risk profile because of support to group companies may also lead to revision in outlook to "negative".
TCG Lifesciences is owned by Indian The Chatterjee Group, which has global operations in biotechnology, technology, information technology services, infrastructure projects, financial services, real estate, software, healthcare, and aviation.
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