Coastal Corporation Limited has informed the Exchange about Credit Rating- New
COASTCORP · price
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CARE Ratings has assigned new ratings and re-affirmed existing ratings for Coastal Corporation Limited's bank facilities totaling ₹341.78 crore. The long-term rating has been downgraded significantly from CARE BBB- (investment grade) to CARE BB (speculative grade) with Stable outlook. Specifically, long-term bank facilities of ₹68.28 crore received CARE BB; Stable, while long-term/short-term facilities of ₹13.50 crore and ₹260.00 crore received CARE BB; Stable / CARE A4. The ₹260 crore facility was enhanced from the previous ₹234 crore. Key concerns include deteriorated capital structure with overall gearing rising to 1.57x, moderate interest coverage of 1.74x, high working capital intensity with 84% fund utilization, and 84% export concentration in the US market. The company faces challenges from US countervailing duties, a ₹35 crore cost overrun on its ethanol plant, and margin compression. However, revenue improved 45% year-on-year in FY25 to ₹635.40 crore, driven by 48% volume growth, and the ethanol plant contributed ₹103 crore to revenue since commencing operations in September 2025.
The downgrade to CARE BB (speculative grade) signals material credit risk and may increase borrowing costs. Shareholders should note the elevated leverage, weak coverage ratios, and US tariff-related headwinds, though improved volumes and the new ethanol business provide some offset.