Coastal Corporation Limited has received reaffirmation of its credit ratings from CARE Ratings Limited for bank facilities totaling ₹234.00 crore. The rating agency maintained its previous assessments while acknowledging both operational improvements and ongoing challenges faced by the seafood processing and export company.

Credit Rating Details

CARE Ratings reaffirmed the company's credit ratings without any changes to the previous assessments:

The rating reaffirmation was communicated to both NSE and BSE on January 10, 2026, in compliance with SEBI LODR Regulations 2015.

Financial Performance Highlights

The company demonstrated significant revenue growth in recent periods, with total operating income improving by 44.50% from ₹439.71 crore in FY24 to ₹635.40 crore in FY25. This improvement was primarily driven by a 48% increase in production volumes to 9,329 metric tonnes, enabled by full-scale operations of the third processing unit.

In H1FY26, the company achieved total operating income of ₹343.34 crore, representing a 19% increase compared to H1FY25. PBILDT margins improved to 7.93% in H1FY26 from 5.93% in the previous period, supported by better sales realizations and lower material costs.

Operational Challenges and Market Dynamics

The rating agency highlighted several challenges affecting the company's operations. Profitability margins decreased in FY25 due to countervailing duties imposed by the USA and continued inflation in input raw material and freight costs. The company faces geographical concentration risk with approximately 84% of total income derived from export sales, primarily to the US market.

Following the US government's imposition of 50% reciprocal tariffs on Indian exports in August 2025, Coastal Corporation has actively pursued market diversification. The company entered Chinese, Russian, Japanese, and European markets and established strategic partnerships with Japan's Toyo Reizo Co. Limited and South Korea's SPC GFS Co. Limited.

Capital Structure and Liquidity Position

The company's capital structure showed some deterioration with overall gearing increasing to 1.57x in FY25 from 1.28x in FY24 due to higher total debt. The PBILDT interest coverage ratio declined to 1.74x in FY25 compared to 2.12x in FY24, while total debt to gross cash accruals remained moderate at 23.02x.

Liquidity remains stretched but is supported by a year-end balance of ₹59.57 crore against debt repayments of ₹8.00 crore in FY26. However, maximum fund-based working capital utilization remained high at 96% for the 12 months ended June 30, 2025.

Ethanol Project Impact

The company's ethanol plant project through subsidiary Coastal Biotech Private Limited experienced cost overruns of ₹35.00 crore due to infrastructure additions and delays in machinery supply. The plant commenced operations in May 2025, but the project has created pressure on liquidity due to debt repayments and interest charges from project financing.

Rating Outlook and Sensitivities

CARE Ratings maintained a stable outlook, believing the company will continue to benefit from extensive promoter experience in the industry. Positive rating factors include potential improvement in overall gearing below 1.0x, PBILDT margin improvement above 9%, and stabilization of the ethanol plant operations.

Negative factors that could impact ratings include overall gearing deteriorating beyond 1.50x or significant decline in total operating income exceeding 30% year-on-year with PBILDT margins falling below 6%.

Coastal Corporation Limited has announced its financial results for the quarter ended September 30, 2025, showcasing a notable increase in profitability and revealing plans for corporate restructuring.

Financial Performance

The company reported a consolidated net profit of Rs 366.65 lakhs for Q2 2025, marking a significant improvement in its financial performance. On a standalone basis, the net profit stood at Rs 462.29 lakhs.

Coastal Corporation's total revenue reached impressive figures, with consolidated revenue at Rs 16,552.75 lakhs and standalone revenue at Rs 15,395.60 lakhs for the quarter.

Key Financial Highlights

Corporate Restructuring

In a strategic move, the Board of Directors has considered a proposal to merge two of its wholly-owned subsidiaries:

1. Continental Fisheries India Limited (CFIL)
2. Coastal Biotech Private Limited (CBPL)

This decision signals the company's efforts to streamline operations and potentially enhance operational efficiency.

Operational Updates

Coastal Biotech Private Limited, a subsidiary of Coastal Corporation, has achieved full operational status. The company has commenced selling grain-based Ethanol to Oil Marketing Companies (OMCs), marking a significant milestone in its business expansion.

Rights Issue Utilization

The company confirmed that there has been no deviation in the use of funds raised through the Rights Issue of Partly Paid-Up Equity Shares, adhering to the objectives stated in the letter of offer dated August 25, 2022.

Contingent Liabilities

Coastal Corporation faces contingent liabilities related to Fuel Power Purchase Cost Adjustment (FPPCA) charges:

• Rs 74.78 lakhs for the financial year 2022-2023
• Rs 108.06 lakhs for the financial year 2023-2024

The company is in the process of filing appeals against these charges before the Appellate Tribunal for Electricity (APTEL).

This quarterly report demonstrates Coastal Corporation's resilience and strategic initiatives in navigating the current business landscape. The proposed merger of subsidiaries and the operational success of Coastal Biotech Private Limited indicate the company's focus on consolidation and growth in diverse sectors.