India Glycols Limited — Credit Ratings, 25-03-2025: Credit Rating

India Glycols Limited reported consolidated total operating income of ₹3,294 crore for FY24, marking a 25% growth year-over-year, with a significant contribution from its biofuels segment, which expanded rapidly from ₹9 crore in FY22 to ₹770 crore in 9MFY25. The increase in revenue is also attributed to scaling up distillery operations to supply ethanol to oil marketing companies in India.

Net profit stood at ₹173 crore for FY24, reflecting a growth of 23% from the previous year, while earnings per share (EPS) increased to ₹10.53. Profitability was driven by a strong performance in the country liquor segment following approved price hikes by state governments. However, operating margins remained moderate at 12.22%, impacted by input cost volatility in the BSPC and PS segments.

Operational costs saw an increase due to the high expenditures associated with expanding manufacturing capacities and a greater requirement for working capital, which limited cost efficiencies.

The company's balance sheet shows an overall gearing ratio of 0.98x, indicating a moderately leveraged position. With adequate liquidity expected, scheduled repayments for FY25 are manageable against projected cash accruals.

Looking ahead, the strategic focus may include consolidating operations and generating cash flows from existing capacities. Market sentiment stays cautious, given the regulatory risks in the liquor industry and input cost pressures.

Based on the current financial performance and growth trajectory, a hold position can be considered, balancing growth potential against inherent risks.