Rating Rationale
December 26, 2025 | Mumbai
Rajshree Sugars and Chemicals Limited
Rating upgraded to 'Crisil BB- / Stable'
 
Rating Action
Total Bank Loan Facilities RatedRs.644 Crore
Long Term RatingCrisil BB-/Stable (Upgraded from 'Crisil B/Stable')
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

Crisil Ratings has upgraded its rating on the long-term bank facilities of Rajshree Sugars and Chemicals Ltd (RSCL) to ‘Crisil BB-/Stable’ from ‘Crisil B/Stable'.

 

The rating action follows prepayment of Rs 13 crore by RSCL in October 2025 towards ICICI Bank, funded through sale of non-core assets and accrual from operations. As a result, the term loan facility with ICICI Bank is fully settled, while the operationally convertible debenture/ non-convertible debenture (OCD/ NCD) is partially settled to the extent of Rs 2.4 crore, thus reducing the debt obligation in fiscal 2027.

 

RSCL has ensured timely debt servicing post the resolution plan in 2021. The company has also demonstrated its track record for prepayment history in fiscals 2026 and 2023 through sale of non-core assets and operating profits and is currently well ahead of schedule. Recently, one time settlement (OTS) between RSCL and Sugar Development Fund (SDF) was executed during March 2025.  

 

The rating upgrade factors in Crisil Ratings belief that RSCL will continue to service its debt obligation on a timely basis, supported by adequate cash flow from operations, which would aid net cash accrual in the second half of fiscal 2026.

 

The rating continues to factor in RSCL's modest financial risk profile and susceptibility to regulatory risks in the sugar industry. However, these weaknesses are partially offset by the promoters' extensive industry experience and availability of diverse revenue streams.

Analytical Approach

Crisil Ratings has evaluated the standalone business and financial risk profiles of RSCL.

Key Rating Drivers - Strengths

Established regional presence and diverse revenue streams: RSCL has established presence in sugar industry as reflected in turnover of Rs 470-770 crore for the four fiscals through 2025. The company has integrated operations with bagasse-based cogeneration plant of 54.5-megawatt and distillery capacity of 125 kilo litres per day.

Key Rating Drivers - Weaknesses

Modest financial risk profile: The financial risk profile was modest as indicated by subdued capital structure and debt protection metrics. The debt protection metrics remained modest as reflected in interest coverage and net cash accrual to adjusted debt ratios at 2.6 times and 0.11 time, respectively, in fiscal 2025 (2.6 times and 0.10 time, respectively, in fiscal 2024). The capital structure was modest as indicated by gearing at 1.13 times as on March 31, 2025 (1.48 times a year earlier).

 

Susceptibility to regulatory changes and cyclicality in the sugar industry: The sugar manufacturing industry is highly regulated and exposed to seasonality in cane production. These factors impact the scale of operations and profitability.

Liquidity Stretched

Liquidity is indicated by stretched net cash accrual against debt obligation. As per the resolution plan, repayments are ballooning in nature and repayment for OCD/NCD will be increasing from fiscal 2027. However, the company has prepaid till June 2026 during April 2025 as well as fully prepaid term loan of ICICI Bank with another prepayment tranche in October 2025 through sale of non-core assets as well as operating cash flow. The company maintained free cash of Rs 2-5 crore for the seven quarters ended the second quarter of fiscal 2026. Bank limit utilisation was 57% on average for the five months ended October 31, 2025, for working capital limit of Rs 50 crore, which will support liquidity.

Outlook Stable

Crisil Ratings believes RSCL will continue to benefit from the extensive experience of the promoters.

Rating sensitivity factors

Upward factors

  • Long track record of timely debt servicing
  • Improvement in revenue and sustenance of earnings before interest, depreciation, taxes and amortisation to above 8%

 

Downward factors

  • Decline in revenue by above 25% or dip in profitability, leading to low cash accrual
  • Stretch in the working capital cycle, impacting the financial risk and liquidity profiles

About the Company

Based in Coimbatore (Tamil Nadu), RSCL was incorporated in 1985 and is a fully integrated sugar manufacturer with distillery and cogeneration capabilities. The operations of the company are managed by R Varadarajan, wholetime director; G Sathiyamoorthi, president; and C S Sathiyanarayanan, CFO. M Ponraj is the secretary. Rajshree Pathy is the non-executive chairperson of the company.

Key Financial Indicators

As on / for the period ended March 31

Units

2025

2024

Operating income

Rs crore

643.47

765.88

Reported profit after tax (PAT)

Rs crore

8.09

13.76

PAT margin

%

1.26

1.80

Adjusted debt/Adjusted networth

Times

1.13

1.48

Interest coverage

Times

2.53

2.44

Status of non cooperation with previous CRA:

RSCL has not cooperated with ICRA, which has classified the company as non-cooperative through a release dated 25th October, 2019. The reason provided by ICRA is non-furnishing of information for monitoring of ratings.

Any other information: Not applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Complexity Levels Rating Outstanding with Outlook
NA Proposed Long Term Bank Loan Facility NA NA NA 358.66 NA Crisil BB-/Stable
NA Rupee Term Loan NA NA 31-Mar-30 19.50 NA Crisil BB-/Stable
NA Rupee Term Loan NA NA 31-Mar-30 12.01 NA Crisil BB-/Stable
NA Rupee Term Loan NA NA 31-Mar-30 29.54 NA Crisil BB-/Stable
NA Rupee Term Loan NA NA 31-Mar-30 216.37 NA Crisil BB-/Stable
NA Rupee Term Loan NA NA 31-Mar-30 7.92 NA Crisil BB-/Stable
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 644.0 Crisil BB-/Stable 28-04-25 Crisil B/Stable 29-01-24 Crisil D   -- 30-11-22 Crisil D Crisil D
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Rating
Proposed Long Term Bank Loan Facility 358.66 Crisil BB-/Stable
Rupee Term Loan 19.5 Crisil BB-/Stable
Rupee Term Loan 12.01 Crisil BB-/Stable
Rupee Term Loan 29.54 Crisil BB-/Stable
Rupee Term Loan 216.37 Crisil BB-/Stable
Rupee Term Loan 7.92 Crisil BB-/Stable
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)

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