Chemplast Sanmar Limited has informed the Exchange about Credit Rating- Revision
CHEMPLASTS · price
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On the reaction day the stock moved 0.2 pts more than Nifty Microcap 250 and 1.0 pts more than its Specialty Chemicals peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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CRISIL has downgraded Chemplast Sanmar Limited's long-term bank loan rating from CRISIL AA-/Negative to CRISIL A+/Stable, while reaffirming the short-term rating at CRISIL A1+. The same action was taken for its wholly-owned subsidiary Chemplast Cuddalore Vinyls Limited. Total bank loan facilities stand unchanged at Rs. 1,801 crore for the parent and Rs. 2,550 crore for the subsidiary. The downgrade reflects slower-than-expected recovery in fiscal 2025 due to lower spreads on S-PVC and paste PVC, with cheaper imports (partly from Europe and Japan) limiting benefits from anti-dumping duties. Debt rose to Rs. 1,750–1,800 crore, pushing net debt/EBITDA to 4.5–5x and interest cover to a weak 1.2x. However, the outlook improved from Negative to Stable on hopes of better operating profits in fiscal 2026, supported by full-year benefits of anti-dumping duty on paste PVC, stable PVC prices, and growth in the custom manufacturing chemicals division.
Shareholders should view this as a negative signal — the one-notch downgrade signals weaker-than-expected financial health and higher leverage, though the shift to a Stable outlook and still-strong liquidity (Rs. 550–600 crore cash) cap the downside. Expect near-term pressure on the stock, with borrowing costs potentially rising modestly on the Rs. 4,351 crore combined loan book.