Aksharchem (India) Limited has received a rating review from CARE Ratings Limited, with the credit rating agency revising the company's outlook to Negative from Stable while reaffirming its existing credit ratings on bank facilities worth ₹143.41 crore. The development was communicated to stock exchanges on February 26, 2026.

Rating Actions and Facility Details

CARE Ratings has taken specific actions across different categories of bank facilities:

The total bank facilities under review amount to ₹143.41 crore, reflecting the company's borrowing requirements across different tenures and purposes.

Key Rating Strengths

The ratings continue to derive support from several fundamental strengths. The company benefits from experienced and resourceful promoters, with Paru M. Jaykrishna bringing over three decades of experience in the chemical industry. Aksharchem maintains an established export presence across more than 20 countries and holds approximately 25% share in total Vinyl Sulphone exports from India.

The company's capital structure remains comfortable with overall gearing of 0.25x as of March 31, 2025, compared to 0.20x in the previous year. This reflects the management's conservative approach towards debt management despite business-related volatility.

Financial Performance Analysis

Aksharchem's financial performance shows mixed trends across different periods:

During FY25, the company reported 15% year-on-year growth in total operating income to ₹346.77 crore. The PBILDT margin improved significantly by 668 basis points to 7.17% in FY25 from 0.50% in FY24, driven by favorable product realizations and improved capacity utilization.

Recent Performance Challenges

However, 9MFY26 provisional financials reveal concerning trends. The company reported total operating income of ₹266.75 crore, representing modest 4% year-on-year growth. Operating profitability declined sharply with operating margin falling by 296 basis points to 4.43% from 7.39% in 9MFY25.

The margin compression was primarily attributed to weaker realizations in dye intermediates and pigments segment amid muted demand, which was impacted by imposition of 50% tariff on Indian exports by the USA. This resulted in a net loss of ₹5.24 crore in 9MFY26 compared to a profit of ₹3.33 crore in 9MFY25.

Rating Sensitivities and Outlook

The Negative outlook reflects CARE's expectation that sustained weak performance could lead to lower than envisaged profitability and deterioration in debt coverage metrics. The outlook may be revised to Stable if the company demonstrates sustained improvement in operating profitability, supported by healthy order book and successful break-even of operations in the silica segment.

Positive rating factors include significant increase in scale of operations, PBILD margin above 15% on sustained basis, and improvement in return on capital employed above 15%. Negative factors encompass PBILD margin below 8% and deterioration in total debt to PBILD beyond 3.5 times on sustained basis.

Source: None/Company/INE542B01011/8247de2b-64a6-4272-b60f-ea1183af4668.pdf

AksharChem (India) Limited announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing a significant decline in profitability. The Board of Directors approved these results in their meeting held on January 28, 2026.

Financial Performance Overview

The company's quarterly performance showed a marked deterioration compared to the previous year. Revenue from operations declined while the company moved from profit to loss territory.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, the company's performance showed mixed results with revenue growth but profitability challenges.

Exceptional Items and Insurance Settlement

The company received a partial insurance settlement of ₹169.61 lakhs during the second quarter related to a fire incident that occurred on May 2, 2024, at the VS Plant located at Village Indrad. The company had initially recognized a loss of ₹402.18 lakhs due to damage to property, plant & equipment and inventory from the fire incident.

Solar Power Plant Commissioning

AksharChem successfully commissioned its ground-mounted solar power plant with a capacity of 5.19 MWp (DC) / 3.85 MWp (AC) at Village Makdala, Taluka Deodar, District Banaskantha. The solar power generation commenced on November 12, 2025, following the Certificate of Commissioning from the Gujarat Energy Development Agency (GEDA). This facility is designed for captive consumption at the company's factory located at Village Indrad.

Operational Expenses Breakdown

The company's total expenses for Q3 FY26 stood at ₹8,349.40 lakhs compared to ₹8,921.61 lakhs in Q3 FY25. Key expense components included:

• Cost of materials consumed: ₹5,473.97 lakhs
• Power & Fuel: ₹1,170.01 lakhs
• Other expenses: ₹1,621.98 lakhs
• Depreciation and amortisation: ₹419.81 lakhs
• Employee benefit expense: ₹364.37 lakhs

Corporate Governance and Compliance

The financial results were reviewed by the Audit Committee and approved by the Board of Directors. The statutory auditors Talati & Talati LLP completed the limited review as required under Regulation 33 of SEBI LODR Regulations. The company operates in a single segment under "Chemical Business" as per Ind AS 108 Operating Segments.