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Crisil Ratings reaffirms ratings of Kabra Extrusiontechnik at 'A/A1' with 'negative' outlook

07-Jan-26 16:02 Hrs IST

Crisil Ratings stated that the continuation of negative outlook takes into account subdued operational performance of the company in the first half of fiscal 2026. Battery division continues to book operating losses, though a recovery in revenue was observed during the period.

This, along with a slight decline in profitability from the traditional extrusion business due to a changes in the product mix, has led to an overall decline in the profitability of the company during the first half of fiscal year 2026.

Despite moderation in the business risk, the financial risk profile and liquidity position of KEL remain adequate amid negligible long-term debt, moderate capex obligation, and free cash and equivalents of Rs 44 crore as on September 30, 2025.

The financial risk profile of the company is expected to remain adequate, despite an increase in debt, due to a healthy net worth and limited long-term debt and capex obligations.

Liquidity remains comfortable with free cash and liquid investment of Rs 44 crore as on 30 September 2025, which would be sufficient for repayment of debt obligations of remaining Rs 2.67 crore during the remaining half of fiscal 2026.

Net cash accrual is expected to be in the range of Rs 28-30 crore, which will be sufficient for the annual capex plans of Rs 20-22 crore for fiscal 2026.

The ratings continue to reflect KEL's established market position in the extrusion machinery business and its adequate financial risk profile.

These strengths are partially offset by exposure to intense competition in the extrusion machinery segment, working capital-intensive operations, and susceptibility to changes in government policies and customer concentration in the battery division.

KEL is a part of the Kolsite group of companies. It manufactures plastic extrusion machinery and mono and multilayer blown film plants, used in industries such as pipes and packaging.

For the six months ended 30 September 2025, operating income was Rs 221 crore and loss was Rs 6 crore, against Rs 216 crore and profit after tax of Rs 15 crore, respectively, during the corresponding period of the previous fiscal.

The scrip had declined 0.86% to end at Rs 218.10 on the BSE today.

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