Hariyana Ship Breakers Ltd has informed stock exchanges about a credit rating downgrade by Acuite Ratings & Research Limited. The rating agency has downgraded the company's long-term bank facilities to 'ACUITE BB' from 'ACUITE BB+' while maintaining its short-term facilities rating, reflecting operational challenges in the ship-breaking industry.

Rating Changes and Facility Details

The rating action affects the company's banking facilities across different tenures and amounts:

The downgrade comes as Acuite Ratings cited the company's significantly subdued operating performance in FY25 and FY26, primarily due to the absence of ships available for dismantling operations.

Operational Performance Impact

The company's core ship-breaking operations have faced severe challenges, resulting in dramatic revenue decline. Key performance indicators show the extent of operational difficulties:

The company reported negligible revenues of Rs 0.22 crore in FY25 compared to Rs 148.63 crore in FY24, representing a decline of over 99%. Despite operational challenges, the company maintained positive profit after tax of Rs 1.60 crore, supported largely by investment income rather than operational contributions.

Financial Risk Profile Assessment

Despite operational setbacks, Haryana Ship Breakers maintains a moderate financial risk profile with several supporting factors:

Strengths:

• Net worth of Rs 146.87 crore as of March 31, 2025
• Low gearing at 0.11 times in FY2025
• Adequate coverage indicators with interest coverage at 2.25 times
• DSCR at 1.88 times in FY2025
• Total Outside Liabilities to Tangible Net Worth ratio at 0.13 times

Key Concerns:

• Significant portion (~94%) of net worth invested in associate/affiliate real estate entities
• Continued operating losses due to ship unavailability
• Susceptibility to volatile steel prices and geopolitical factors affecting vessel inflow

Company Background and Operations

Incorporated in 1981, Haryana Ship Breakers operates in the ship-breaking industry at Alang-Sosiya, Bhavnagar, Gujarat, on a 4,185 sq. m plot leased from Gujarat Maritime Board. The company also engages in trading ferrous and non-ferrous metals, coils, and maintains real estate investments. The promoters bring over three decades of experience in the ship-recycling business, providing established industry relationships and operational familiarity at Alang, a key ship-breaking hub.

Liquidity and Future Outlook

The rating agency assessed the company's liquidity position as adequate, supported by positive cash accruals of Rs 2.72 crore in FY2025 against modest debt obligations of Rs 0.14 crore. Future cash accruals are expected in the range of Rs 5.45-5.80 crore over the medium term. The outlook remains 'Stable' with rating sensitivity dependent on operational revival and ship availability. Management expects improvement in FY2027 as discussions with brokers for vessel purchases continue.

Source: None/Company/INE400G01011/f1fa878e-3ddb-4e80-b63a-257862f252e0.pdf

Hariyana Ship Breakers Limited has delivered exceptional financial performance in the third quarter of FY26, demonstrating significant growth across key financial metrics. The company's Board of Directors approved the unaudited standalone and consolidated financial results for the quarter ended December 31, 2025, during their meeting held on February 13, 2026.

Outstanding Quarterly Performance

The company reported remarkable financial results for Q3FY26, with net profit reaching ₹681.89 lakhs compared to ₹42.38 lakhs in Q3FY24, representing an extraordinary growth of 1509%. Revenue from operations showed substantial improvement, growing to ₹219.61 lakhs from nil in the corresponding quarter of the previous year.

Nine-Month Period Performance

For the nine months ended December 31, 2025, Hariyana Ship Breakers achieved outstanding results with net profit of ₹974.98 lakhs, marking a substantial increase of 749% from ₹114.83 lakhs in the corresponding period of FY25. Revenue from operations for the nine-month period reached ₹349.61 lakhs compared to ₹22.45 lakhs in the previous year.

Segment-wise Analysis

The company operates primarily through two geographic segments - Mumbai and Bhavnagar. The Mumbai segment generated revenue of ₹739.05 lakhs in Q3FY26 compared to ₹219.17 lakhs in Q3FY24, while the Bhavnagar segment contributed ₹219.69 lakhs compared to ₹0.08 lakhs in the previous year's quarter.

Financial Position and Structure

Hariyana Ship Breakers maintained a stable capital structure with paid-up equity share capital of ₹616.67 lakhs, consisting of shares with a face value of ₹10 each. The company's total assets stood at ₹16,757.40 lakhs as of December 31, 2025, compared to ₹16,464.53 lakhs in the previous year.

Corporate Governance

The financial results were reviewed by the Audit Committee and subsequently approved by the Board of Directors. The results have been prepared in accordance with Indian Accounting Standards (Ind-AS) prescribed under section 133 of the Companies Act 2013. The company's consolidated financial statements include results from its subsidiary Haryana Air Products and associates including Goyal Haryana Realty, Orchid Lakeview Developers, Whitefield Projects, and Swastik Developers.