CARE Ratings affirms 'A-' rating of India Glycols with 'stable' outlook

The agency has also affirmed the company's short term rating at 'CARE A2+'.

CARE Ratings stated that the ratings continue to take comfort from company's diversified revenue streams, which mitigate volatility impact in one segment and healthy market position in bio-based glycols, potable spirit (PS), and nutraceutical segment, leading to large scale of operations.

The company has also significantly scaled up its biofuel business over the recent couple of fiscals as well.

These rating strengths are partially tempered by its improving yet moderate operating profitability which is vulnerable to volatility in input costs and company's moderately leveraged capital structure and average debt coverage metrics.

The company's capital expenditure program is largely completed and is expected to focus on generating significant cashflows from the same and strengthen its coverage ratio, particularly, net debt (including LC acceptances) to PBILDT below 4.5x by FY25 end. Also, the PS business is highly regulated by government.

Factors like improvement in debt coverage metrics and sustenance of significant liquidity buffers built up from cash and cash equivalents could lead to a ratings upgrade.

However, reduction in diversification of business risk profile and incremental debt programmes or deterioration of profitability could lead to ratings downgrade.

India Glycols (IGL) manufactures green technology-based bulk, specialty, and performance chemicals and natural gums, spirits, industrial gases, sugar, and nutraceuticals. It operates under three broad segments: Bio-based specialities & Performance Chemicals (BSPC), Biofuels, potable spirit (PS), and ennature biopharma (EB).

The scrip shed 0.19% to currently trade at Rs 1217.65 on the BSE.