Credit rating on term loan facilities
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Acuité Ratings has downgraded Jagatjit Industries' long-term rating on its Rs. 160.60 crore term loan from IndusInd Bank from ACUITE BB- to ACUITE B+, with a Stable outlook. A separate proposed bank facility of Rs. 39.40 crore has been withdrawn without a rating at the company's request. The downgrade reflects a revenue fall from Rs. 556.93 crore in FY24 to Rs. 491.50 crore in FY25, a swing to a net loss of Rs. 23.28 crore, delayed ethanol plant operations, a postponed Gurugram property sale, and weak cash flows. Debt-to-equity worsened sharply from 3.07x to 7.56x, and liquidity is described as stretched.
The move to a sub-investment-grade rating signals higher perceived credit risk, which could make future borrowing more expensive and harder to obtain. Shareholders should view this as a negative signal on the company's near-term financial health, though the Stable outlook suggests no immediate expectation of further deterioration.