HLE Glascoat Limited — Credit Ratings, 15-04-2025: Credit Rating

ICRA has reaffirmed the credit ratings for HLE Glascoat Limited across various instruments, maintaining a stable outlook. The long-term ratings for cash credit and term loans remain at [ICRA]A (Stable), with short-term ratings for bank guarantees and derivative limits at [ICRA]A2+. The total rated amount remains unchanged at ₹517.5 crore.

The reaffirmation reflects HLE Glascoat’s established position in the glass-lined and filtration equipment market, bolstered by its recent acquisition of Thaletec GmbH, which has enhanced its geographical reach. Despite facing a temporary slowdown in demand, the order book stands at ₹683 crore as of December 31, 2024, indicating healthy revenue visibility. The company has diversified its product offerings with the acquisition of a stake in Kinam Engineering Industries, aimed at penetrating the heat transfer equipment segment.

However, challenges persist, including working capital-intensive operations driven by high inventory holding periods and exposure to raw material price volatility. The debt metrics have weakened recently due to increased borrowing associated with acquisitions, although improvements are expected as profitability rebounds. The interest coverage ratio has dipped but remains within manageable limits.

Overall, while HLE Glascoat is positioned well for future growth, particularly in the pharmaceuticals and specialty chemicals sectors, caution is warranted regarding its evolving debt profile and market conditions.