Godavari Biorefineries Limited has informed the Exchange about Credit Rating
GODAVARIB · price
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CARE Ratings has reaffirmed Godavari Biorefineries' long-term bank facility rating at CARE BBB+ with Stable outlook and short-term bank facility rating at CARE A2, covering total facilities of around ₹836 crore. The reaffirmation reflects the company's adequate operating performance in FY25 and 9MFY26, with total operating income growing 11% year-on-year to ₹1,870 crore in FY25. However, profitability came under pressure with PBILDT margin contracting to 5.55% (from 7.93%) due to higher sugarcane prices, restrictions on sugar exports, and molasses availability issues. The company also posted a net loss of around ₹23 crore in FY25 and ₹49 crore in 9MFY26. The overall gearing improved sharply to 0.94x in FY25 from 2.79x in FY24, helped by IPO proceeds that were used to prepay term loans. The Stable outlook indicates expectations of healthy cash accruals and adequate debt coverage over the medium term, supported by the upcoming grain-based distillery project slated for Q1FY27.
The reaffirmation of investment-grade ratings with a Stable outlook is neutral to mildly positive for shareholders, signaling that lenders and rating agencies see no immediate risk to the company's credit profile despite near-term profitability pressures. Shareholders can expect continued focus on debt reduction and the grain-based distillery project, which is critical to improving margins and is a key rating sensitivity.