GRP Limited has announced a credit rating downgrade by CRISIL Ratings, citing deteriorating business fundamentals due to trade tariff impacts. The company informed stock exchanges on December 11, 2025, about the revision in its credit rating under regulatory disclosure requirements.

Credit Rating Revision Details

CRISIL Ratings has downgraded the credit rating on GRP Limited's bank facilities due to weakening business and financial risk profile. The rating agency specifically cited trade tariffs and their resultant impact on expected operating performance as the primary reason for the downgrade.

The revised credit ratings are structured as follows:

Impact of Trade Tariffs

The downgrade reflects CRISIL's assessment of the company's deteriorating business environment. Trade tariffs have created challenges for the company's operational outlook, leading to concerns about future financial performance. The rating agency's decision indicates expectations of reduced operating efficiency and potential pressure on the company's financial metrics.

Regulatory Compliance

GRP Limited has fulfilled its disclosure obligations under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company communicated the rating revision to both BSE Limited and National Stock Exchange of India Limited on the same day. Company Secretary and Compliance Officer Jyoti Sancheti signed the regulatory filing, ensuring compliance with listing requirements.

Financial Exposure

The credit rating revision affects bank loan facilities totaling ₹152.62 crores. While the short-term rating remains stable at CRISIL A2, the long-term rating downgrade from A- to BBB indicates increased credit risk perception. This revision may impact the company's borrowing costs and future access to credit facilities in the current challenging business environment.

GRP Limited , a leading player in the rubber recycling industry, has reported a mixed set of results for the second quarter of fiscal year 2026, as the company navigates through global challenges while advancing its strategic initiatives.

Financial Performance

The company posted flat revenue growth at INR 1,331.00 million for Q2 FY26. Despite the challenging environment, GRP managed to improve its EBITDA, which rose by 13% to INR 114.00 million. However, profit after tax (PAT) declined by 22%, primarily due to the impact of US tariffs affecting export volumes and margins.

Key Highlights

Operational Updates

Pyrolysis Plant Commencement

A significant milestone for GRP Limited this quarter was the successful commencement of pyrolysis operations at its Solapur facility. This new plant is noteworthy for several reasons:

1. It houses one of India's largest single-line continuous reactor setups.
2. The facility is integrated with GRP's existing reclaim rubber operations.
3. It incorporates a closed-loop energy system utilizing syngas for clean and efficient heating, enhancing energy efficiency and reducing environmental impact.

The company expects this new operation to generate revenue of INR 250.00-300.00 million in the second half of FY26.

Product Recovery

The pyrolysis plant enables the recovery of three key material streams:

1. Tyre pyrolysis oil
2. Char (to be upgraded to recovered carbon black)
3. Steel wire

Business Segment Performance

• Reclaim Rubber: The domestic market showed strong growth with a 20% increase in revenues, offsetting a 2% decline in export revenues.
• Non-Reclaim Rubber: This segment underperformed, affected by soft uptake across all verticals.
• Polymer Composite Business: Due to commercial unviability exacerbated by US tariffs and strong local competition, GRP has decided to discontinue this business.

Market Challenges and Outlook

The company faced several challenges during the quarter:

1. US Tariffs: These significantly impacted export volumes and margins, particularly affecting the reclaim rubber business.
2. Global Market Volatility: Persistent macroeconomic challenges and industry headwinds affected overall performance.
3. Pricing Pressures: Commodity pricing pressures impacted margins across segments.

Despite these challenges, GRP Limited remains optimistic about its long-term prospects, particularly with the new pyrolysis operations and ongoing investments in technology upgradation and energy efficiency.

Management Commentary

Harsh Gandhi, Joint Managing Director of GRP Limited, commented on the results: "While short-term challenges, particularly the U.S. tariff situation, have impacted our performance this quarter, we continue to remain confident about our long-term story. The focus continues to be on operational excellence and strategic execution to strengthen our competitive position."

GRP Limited's mixed Q2 results reflect the company's resilience in a challenging global environment. While facing headwinds from US tariffs and market volatility, the company's strategic initiatives, particularly the new pyrolysis plant, position it for potential growth in the coming quarters. Investors will be watching closely to see how these initiatives translate into financial performance in the second half of FY26 and beyond.