The agency has reaffirmed its rating on the long-term bank facilities of Panama Petrochem at ‘CARE A+; Stable.CARE Ratings said that the re-affirmation of the long-term ratings and revision in short-term ratings assigned to the bank facilities of Panama Petrochem (PPL) factors in the consistent operating performance, strong capital structure and liquidity position with healthy debt protection metrics.PPLs total operating income grew by around 5% in FY23 majorly due to improved sales realizations. The operating profitability margins have remained stable at 13.74% in FY23. This was on account of healthy capacity utilization of its manufacturing facilities with favourable changes in the product mix towards a higher share of value-added products and other cost-control measures implemented in the last few years.The revision in short-term ratings considers improvement in the liquidity profile, backed by improvement in operating cycle, significant cash balance and low utilization of working capital limits. The company does not have any major capex plan in the medium term and the minor capex outlay in the range of Rs 20-25 crore each year is expected to be funded out of internal accruals.The ratings continue to derive strength from experience of the promoters in the petrochemical industry with diverse product offerings and long-standing relationship with reputed clientele. The ratings are, however, constrained by vulnerability of the companys profitability to the fluctuations in forex rates and base oil prices which are volatile being a crude oil derivative. The companys operations are also exposed to high competition in the industry from other established players.Panama Petrochem is engaged in the business of manufacturing of petroleum derivative products which find application in industries such as cosmetics & pharmaceuticals, inkscoatings, textiles, automo bile, power, engineering, and rubber. The product portfolio includes liquid paraffin oils, petroleum jelly, ink oils, antistatic coning oil, rubber process oils, transformer oils, cable filling compounds and paraffin wax.The companys consolidated net profit declined 9.61% to Rs 50.81 crore on a 0.43% rise in sales to Rs 510.40 crore in Q4 FY23 over Q4 FY22.The scrip rose 0.46% to currently trade at Rs 306 on the BSE.