CARE Ratings reaffirms ratings of Everest Kanto Cylinder at 'A-/A2+'
The agency has also affirmed the company's short-term rating at 'CARE A2+'.
CARE Ratings stated that the reaffirmation of ratings to bank facilities of Everest Kanto Cylinder (EKCL) factors in its stable performance in FY26, marked by stable total operating income (TOI) and improved profitability despite muted performance of its overseas operations.
The West Asia conflict adversely affected domestic and international operations owing to supply-chain disruptions, logistical challenges in overseas operations, and higher freight costs, which was reflected in moderation in performance in Q1FY27.
EKCL has undertaken strategic capacity expansion initiatives across India, Egypt and the United States (US). Timely completion of these projects and ramp up of operations will remain a key rating monitorable.
The ratings continue to derive strength from EKCL?s long-standing position as one of the leading domestic manufacturers of high-pressure seamless steel gas cylinders, a diversified and reputed customer profile spanning automobile original equipment manufacturers (OEMs), city gas distribution (CGD) entities, and industrial-gas end-users, and high entry barriers in the segment arising from stringent regulatory clearances.
The ratings further factor in EKCL?s comfortable capital structure and debt coverage indicators and adequate liquidity position.
However, rating strengths continue to remain tempered by fluctuating profitability that is susceptible to raw material price and foreign-exchange volatility and working capital intensive operations.
The ratings are further constrained by project execution and stabilisation risk associated with ongoing debt-funded capital expenditures (capex) in India, Egypt and the US and high-cost foreign-currency denominated debt taken to part-fund the project in Egypt.
Everest Kanto Cylinder is engaged in manufacturing high-pressure seamless gas cylinders. Key product lines include CNG cylinders for automotive and CGD networks, industrial gas cylinders (oxygen, nitrogen, argon, and helium among others), jumbo cylinders, cascades, jumbo-skids (for bulk transport and storage), and fire safety equipment (fire extinguishers, suppression systems).
The company's consolidated net profit had reported 41.79% fall in consolidated net profit to Rs 30.03 crore on a 10.49% increase in revenue to Rs 346.31 crore in Q1 FY27 as compared with Q1 FY26.
The scrip advanced 0.66% to currently trade at Rs 107.55 on the BSE.
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