Epigral rises after Crisil Ratings affirms ratings at 'AA/A1+' with 'stable' outlook
Crisil Ratings stated that the rating continues to reflect Epigral?s healthy business risk profile supported by continued diversification in revenue streams, healthy operating margin and improving demand prospects. The rating also factors in a comfortable financial risk profile.
These strengths are partially offset by the company?s high albeit reducing dependence on the intensely competitive chlor alkali industry, exposure to regulatory risks, vulnerability of operating margin to fluctuations in caustic soda prices and exposure to project implementation risks.
Crisil Ratings said that the company's revenue remained largely flat at Rs 2,527 crore in fiscal 2026 due to subdued demand from the construction and infrastructure sectors following the extended monsoon which affected construction activities thereby impacting offtake of few key products such as chlorinated polyvinyl chloride (CPVC) and epichlorohydrin (ECH) which is strongly linked to the sector.
Revenue is expected to grow by 13-15% in fiscal 2027, aided by recovery in volumes, ramp-up of expanded capacities in CPVC, ECH and chlorotoluene, and improved realizations amid elevated raw material prices. Over the medium term, growth is expected to be driven by steady contributions from existing operations and incremental revenues from expanded CPVC and ECH capacities.
The company's operating margin moderated to 22.4% in fiscal 2026 from 28.2% in fiscal 2025, primarily due to a sharp decline in realizations of key products, particularly during the first nine months of the year. While realizations are expected to improve in fiscal 2027 and operating leverage benefits are expected to accrue, operating margins are likely to remain largely stable due to inflationary pressures, elevated energy and raw material costs, and a lag in passing on higher input costs to customers.
Over the medium term, margins are expected to improve gradually, supported by normalization in input costs, better realizations and operating leverage benefits from the ramp-up of expanded capacities.
The agency further said that Epigral?s financial risk profile remained strong supported by healthy capital structure and strong debt protection metrics.
Debt protection metrics continued to remain strong despite moderation in profitability and increase in interest expenses during fiscal 2026, with interest coverage at 8.07 times compared with 13.65 times in fiscal 2025.
The increase in interest expense was largely due to mark-to-market impact on foreign currency borrowings following sharp depreciation in rupee during the year. Interest coverage is expected to improve and sustain at healthy levels over the near to medium term aided by expected improvement in profitability and reduction in debt.
Epigral is a leading integrated manufacturer of chemicals in India. Epigral is the largest manufacturer of CPVC in India and is also the first to set up an Epichlorohydrin plant and Chlorotoluenes value chain plant, in India. Along with ECH and CPVC, Epigral is a leading manufacturer of caustic soda, caustic potash, chloromethanes, hydrogen peroxide, chlorine and hydrogen.
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