Chemfab alkalis has received a credit rating downgrade from India Ratings and Research, reflecting the company's deteriorating financial performance and operational challenges across its business segments. The rating agency has revised the company's long-term rating to IND BBB+ from IND A- with a Negative Outlook, while the short-term rating has been downgraded to IND A2 from IND A2+.

Rating Action Details

India Ratings has taken action on Chemfab Alkalis' bank loan facilities totaling INR1,700 million, with the following changes:

Financial Performance Deterioration

The company's consolidated operating performance showed significant weakness in 9MFY26, with EBITDA declining 38.00% year-on-year to INR187 million compared to INR437 million in FY25. Revenue also contracted to INR2,362 million in 9MFY26 from INR3,344 million in FY25.

Operational Challenges Across Segments

The chemical segment, including chlor-alkali and aluminium chloride operations, continued to record EBIT losses of INR185 million in 9MFY26, compared to losses of INR231 million in FY25. The weak performance stems from subdued caustic soda prices due to global oversupply and reduced capacity utilization levels at around 73.00% in 9MFY26.

The OPVC pipe segment also faced headwinds, with EBIT declining to INR168 million in 9MFY26 from INR305 million in FY25. Weak offtake from the Jal Jeevan Mission kept prices under pressure and resulted in low capacity utilization of 43.00% in 9MFY26, significantly below the 60.00% achieved in FY25.

Liquidity Position Under Stress

Chemfab Alkalis' liquidity position has deteriorated markedly, with cash and liquid investments falling sharply to INR0.30 million at end-9MFY26 from INR210 million in FY25. The company had modest undrawn fund-based lines of INR55 million as of December 2025, while monthly average utilization of its INR300 million fund-based working capital limits increased to 73.00% over 3QFY26.

To address cash flow requirements, the company sold non-core assets and received advance payments totaling around INR245 million in 1HFY26, while borrowing INR110 million from promoter group entity Team Hiitech Eqpt Private Limited.

Capacity Expansion and Future Outlook

Despite current challenges, Chemfab Alkalis has been investing in capacity expansion, with the company expecting to increase OPVC pipe capacity to 23 KTPA by end-1HFY27, representing a 3.80x increase from end-FY24 levels of 6 KTPA. The company also replaced a 30-year-old electrolyser in December 2025, which is expected to reduce breakdowns and enhance operating efficiencies.

India Ratings expects some recovery but notes that the consolidated credit profile and liquidity will remain under pressure over the near term. The Negative Outlook reflects expectations that price recovery in caustic soda may be gradual and JJM pipe offtake remains subdued, despite the company's efforts to diversify its order book with non-JJM projects.

Chemfab alkalis Limited has announced that its Board of Directors will convene on January 28, 2026, to review and approve the company's unaudited financial results for the third quarter of fiscal year 2026. The meeting, scheduled for 2:00 PM, will focus on the financial performance for the quarter and nine months ended December 31, 2025.

Board Meeting Details

The company has formally notified both the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) about the upcoming board meeting in compliance with regulatory requirements. This notification was made pursuant to Regulation 29 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Trading Window Closure

In accordance with the company's Code of Prevention of Insider Trading and SEBI (Prohibition of Insider Trading) Regulations, 2015, Chemfab Alkalis Limited has implemented a trading window closure for all stakeholders. This restriction affects directors, designated employees, other insiders of the company, and their relatives.

The trading window closure details are as follows:

Regulatory Compliance

The announcement demonstrates the company's adherence to regulatory frameworks governing listed entities in India. The formal communication was signed by Bharatraj Panchal, Company Secretary (FCS: 9828), and digitally authenticated on January 22, 2026.

Chemfab Alkalis Limited operates as part of Dr. Rao's Group of Companies and maintains certifications including OHSAS 18001 and ISO 14001. The company's registered office is located at 'TEAM House', GST Road, Vandalur, Chennai, while its manufacturing plant is situated at 'Gnanananda Place', Kalapet, Puducherry.

Market Information

The company trades on both major Indian stock exchanges with the following identifiers:

• BSE Scrip Code: 541269
• NSE Symbol: CHEMFAB
• CIN: L24290TN2009PLC071563

Investors and stakeholders can expect the Q3FY26 financial results to be announced following the board meeting on January 28, 2026, after which normal trading activities will resume within the specified timeframe.