Credit Rating with Credit Rationale issued by CRISIL RATINGS LIMITED.
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CRISIL has downgraded Kaira Can Company Limited's credit ratings on its Rs. 51.5 crore bank loan facilities. The long-term rating was cut from CRISIL BBB+/Stable to CRISIL BBB/Stable, while the short-term rating was cut from CRISIL A2 to CRISIL A3+. The downgrade reflects weaker-than-expected operating performance in FY25, with revenue of Rs. 232 crores and an operating margin of just 3.20%, pulled down by lower-than-expected sales from the can manufacturing division. Net cash accruals fell to Rs. 5.74 crores. However, the company's financial risk profile remains strong with a net worth of Rs. 89 crores, an interest coverage ratio of 31.2 times, and very low debt levels. KCCL continues to benefit from its long-standing tie-up with GCMMF (Amul), which accounts for 85-90% of its revenue. The outlook is stable, and no rating watch has been placed.
The downgrade signals weaker business performance and may marginally raise future borrowing costs, though the company's low debt and strong balance sheet (net worth of Rs. 89 crores vs. adjusted debt/equity of just 0.04x) limit any material financial impact. Existing facilities with Bank of Baroda, DBS Bank, and ICICI Bank remain unaffected in terms of availability, but lenders may reassess limits going forward.