Khaitan Chemicals & Fertilizers Limited has informed the Exchange about Credit Rating- Revision
KHAICHEM · price
▲ positive · ▼ negative · ● neutral filings · teal = economic event · numbered = multiple that day (click to pick). Times IST.
India Ratings and Research (Ind-Ra) has downgraded Khaitan Chemicals & Fertilizers Limited's bank facilities from 'IND BBB' to 'IND BBB-' and placed the rating on watch with developing implications. The downgrade is primarily due to the Middle East conflict causing a sharp increase in sulphur prices from USD 150-160/ton (FY25 average) to USD 500-600/ton, which has severely impacted profitability of Single Super Phosphate (SSP). Raw material costs (INR 12,500-13,000/ton) plus manufacturing costs (INR 3,000-3,500/ton) leave thin margins against current subsidy rate (INR 8,149/ton) and market price (INR 8,500/ton). Three manufacturing plants have been shut down. The company has high working capital utilization at 84% and very low free cash balance of INR 0.8 million. However, improved sulphuric acid profitability and better credit metrics (net leverage improved to 3.5x from 15.8x) provide some support.
The downgrade signals elevated credit risk due to raw material cost pressures and liquidity constraints. The rating watch indicates uncertainty that could lead to further downgrade or upgrade depending on how the company manages to pass on higher costs while maintaining sales volumes.