Meghmani Organics Limited has informed stock exchanges about credit ratings issued to its subsidiary company Kilburn Chemicals Limited by India Rating & Research, a Fitch Group Company. The disclosure was made on February 27, 2026, in compliance with regulatory requirements under SEBI listing regulations.

Regulatory Disclosure Details

The company filed the disclosure pursuant to Regulation 30(6) read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company Secretary & Compliance Officer Jayesh Patel communicated the rating information to both National Stock Exchange of India Limited and BSE Limited through official letters.

The rating letter from India Rating & Research was addressed to GS Chahal, CFO of Kilburn Chemicals Limited, and referenced a rating action commentary released on February 23, 2026. The communication confirmed that while bank-wise facilities were revised, the overall facilities remained unchanged.

Credit Rating Breakdown

India Ratings issued ratings for Kilburn Chemicals Limited's bank facilities with HDFC Bank Limited across two categories:

The total outstanding/rated amount across both facilities stands at INR 2,742.00 million. Both instruments carry the 'Rating Watch with Negative Implications' designation, indicating potential downward pressure on the ratings.

Rating Agency Methodology

India Rating & Research outlined its comprehensive approach to rating assessment in the communication. The agency conducts factual investigations and obtains reasonable verification from independent sources, with the scope varying based on the nature of the rated security and issuer requirements.

Key aspects of the rating methodology include:

• Reliance on factual information from issuers, underwriters, and credible sources
• Reasonable investigation procedures in accordance with established rating methodology
• Verification from independent sources where available
• Consideration of various factors including public information access and third-party reports

The rating agency emphasized that ratings are inherently forward-looking and embody assumptions about future events that cannot be verified as facts. Users are advised that ratings should not be viewed as investment recommendations or financial advice.

Ongoing Monitoring Requirements

India Ratings highlighted the importance of continuous information sharing for maintaining appropriate ratings. The agency noted that ratings may be raised, lowered, withdrawn, or placed on Rating Watch due to changes in information accuracy or adequacy, or for any other reason deemed sufficient by the rating agency.

Kilburn Chemicals Limited is required to promptly provide all material information that may impact the ratings to ensure their continued appropriateness. The rating communication was signed by Abhishek Bhattacharya, Senior Director at India Ratings.

Meghmani Organics Limited held its Q3 FY26 earnings conference call on February 02, 2026, presenting mixed financial results amid challenging market conditions. The company reported standalone revenue of Rs. 485 crores with EBITDA of Rs. 51 crores and profit after tax of Rs. 22 crores for the quarter.

Segment-wise Performance Analysis

The company's revenue composition showed Crop Protection contributing 79% of total revenue, while the Pigment segment accounted for the remaining 21%. The performance varied significantly across segments:

Export Challenges and Market Dynamics

Chairman and Managing Director Ankit Patel highlighted that export volumes in Q3 faced additional pressure due to ongoing uncertainty around US trade policy. This uncertainty impacted not only demand from the US market, which represents 24%-25% of the company's agrochemical exports, but also led to softer demand across other export geographies. The company's formulation business now constitutes approximately 40% of the Crop Protection segment, with technicals making up the remaining 60%.

Titanium Dioxide Operations Suspended

The company took the difficult decision to shut down its Titanium Dioxide plant in November 2025 due to challenging market conditions. The shutdown was necessitated by elevated raw material costs, particularly Sulfuric Acid prices rising from Rs. 4-5 to Rs. 15-18 per unit, and the withdrawal of anti-dumping duties following a court order in September 2025. The Directorate General of Trade Remedies (DGTR) is expected to re-impose anti-dumping duties shortly after addressing procedural lapses.

Nine-Month Financial Performance

For the nine months ended December 31, 2025, the company showed improved performance:

Debt Position and Capital Allocation

As of December 31, 2025, the company's standalone debt stood at Rs. 573 crores, comprising Rs. 455 crores in short-term debt and Rs. 118 crores in long-term debt, resulting in a debt-to-equity ratio of 0.33. On a consolidated basis, total debt was Rs. 783 crores with a debt-to-equity ratio of 0.51. The company achieved debt repayment of approximately Rs. 128 crores during the year.

Future Outlook and Strategic Initiatives

Management expressed confidence in long-term growth prospects despite near-term headwinds. In the Crop Nutrition segment, the company is actively developing international markets for Meghmani Nano Urea, with sample consignments being dispatched for field evaluation across multiple countries. The Nano Urea business currently operates at margins of 20%-22% when running at optimal capacity levels.

The company expects no significant capital expenditure over the next two years, focusing instead on operational improvements and market recovery. Management anticipates the Pigment segment to show improvement from Q1 FY27 onwards through operational efficiency measures and renewable energy adoption, targeting 60% renewable energy usage in the coming years.