India Ratings & Research has downgraded the ratings for Dishman Carbogen Amcis’s existing Non-Convertible Debentures (NCDs) and Long Term/Short-term Bank Facilities to ‘IND A’/Negative. Concurrently, ratings for proposed NCDs were Assigned at the same level. The rating for the Principal Protected Market-Linked Debentures (PP-MLDs) was withdrawn after the instrument was repaid. The downgrade reflects persistent high net adjusted leverage, expected to remain above 3x in FY26, despite expected operational improvements.
Credit Rating Action by India Ratings
Dishman Carbogen Amcis Limited (DCAL) received a rating action from India Ratings & Research (Ind-Ra) on February 18, 2026. The agency has downgraded the ratings for the company’s existing debt instruments and assigned ratings for proposed instruments based on their latest review.
Summary of Rating Changes
The following table summarizes the key rating changes:
Details of Instrument-wise Rating Action
| Facilities/ Instruments | Amount (Rs. in Million) | Ratings | Rating Action |
|---|---|---|---|
| Non-convertible debentures (NCDs) | 1500.00 | IND A/Negative | Downgraded |
| Proposed non-convertible debentures (NCDs) | 2000.00 | IND A/Negative | Assigned |
| Long term/Short-term Facilities (Bank Loan Facilities) | 6609.00 | IND A/Negative/IND A1 | Downgraded |
| Principal protected market-linked debentures$ (PP-MLDs) | 500.00 | WD | Withdrawn |
The rating for the PP-MLDs (INR500 million) was withdrawn as the instrument has been repaid.
Rationale for Downgrade and Negative Outlook
The downgrade and Negative outlook stem primarily from the company’s consistently high net adjusted leverage, which stood at 3.92x in FY25 (down from 6.35x in FY24). Ind-Ra expects this ratio to remain above 3x in FY26 due to higher-than-expected net debt. Standalone leverage remains highly stretched at 9.94x in FY25.
EBITDA margins remain lower than pre-EDQM levels, reporting 19.35% in 9MFY26, though management projects improvement to 19% to 20% in FY26.
Business Strengths and Weaknesses
Strengths
- Diversified business profile, with CRAMS accounting for 84% of 9MFY26 revenue.
- DCAL is strategically expanding and maintains a robust order book, supported by successful inspections like US FDA in May 2024.
Weaknesses
- EBITDA margins are lower than the pre-EDQM level of 24.46%.
- Higher leverage persists, although a capital raise plan of INR10 billion is indicated to bring leverage below 2.5x.
- Stretched working capital cycle, which reached 180 days in FY25.
Liquidity Position
Consolidated liquidity is assessed as Adequate. Unrestricted cash stood at INR6,157 million at 1HFYE26. The free cash flow turned positive to INR906 million in 1HFY26. The company is also planning a capital raise of up to INR10.00 billion to refinance high-cost debt.
Key Financial Indicators Summary (Consolidated, INR million)
| Particulars | 1HFY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue | 13,607 | 27,115 | 26,158 |
| EBITDA | 2,896 | 4,689 | 2,865 |
| EBITDA margin (%) | 21.3 | 17.30 | 11 |
| Net adjusted financial leverage (x) | 3.20 | 3.92 | 6.35 |
Rating Sensitivities
A positive rating action could result from a sustained net adjusted leverage below 3x. Conversely, a sustained leverage above 3x coupled with falling margins could lead to a negative rating action.
Source: BSE
