Global Surfaces Limited — Credit Ratings, 25-02-2025: Credit Rating- Revision

Global Surfaces Limited has announced a board meeting to discuss the financial results for the quarter and half-year.

The company's revenue for FY24 reached ₹225.29 crore, marking a 26% increase from ₹179.26 crore in FY23. This growth can be attributed to strategic market expansion and an uptick in demand, although profitability has been hampered by rising raw material costs.

Net loss widened to ₹19.78 crore in FY24 compared to a loss of ₹24.24 crore in FY23. Earnings per share (EPS) reflect this downturn, emphasizing the need for improved operational efficiency. The EBITDA margin dropped from 21.1% to 16.61% due to increased costs, signaling operational challenges.

Total debt decreased to ₹144.63 crore, contributing to a better debt-to-equity ratio of 0.44 in FY24 versus 0.64 in FY23. However, the intensive working capital requirements are a concern, shown by a rise in gross current asset (GCA) days to 319.

Strategically, the company is anticipated to benefit from the upcoming operationalization of its Dubai plant, which could enhance production efficiency and profitability moving forward.

Given the recent rating downgrade, the outlook remains cautious, but the stabilization efforts and liquidity position imply a cautious buy or hold for investors looking at long-term potential against operational headwinds.