Allcargo Logistics Limited received an updated credit rating for its bank facilities from CARE Ratings Limited on March 5, 2026. The rating assigned is CARE A-; Stable / CARE A2 for Long Term / Short Term Bank Facilities totaling Rs. 255.00 crore. This positive assessment reflects the company’s strong pan-India presence, integrated logistics platform, and expected synergies from recent consolidation efforts in its domestic operations.
Credit Rating Update for Bank Facilities
Allcargo Logistics Limited has been assigned new ratings by CARE Ratings Limited (now CareEdge Ratings) on March 5, 2026. This intimation follows the assignment of ratings to the company’s bank facilities pursuant to the relevant regulatory guidelines.
The assigned ratings are detailed below for the total aggregate facility size:
- Facilities: Long Term / Short Term Bank Facilities
- Amount: Rs. 255.00 crore
- Rating Assigned: CARE A-; Stable / CARE A2
Rationale Highlighting Key Drivers
The assignment of the current rating is primarily driven by several key factors:
- Strong Integrated Platform: Strength derived from Allcargo’s established pan-India presence and its integrated logistics platform offering diversified services, including surface express and contract logistics.
- Operational Synergies: The recent consolidation of express distribution and contract logistics under a single entity is anticipated to boost operational efficiency and facilitate end-to-end fulfillment solutions.
- Promoter Support: The ratings factor in strong ongoing support from the promoter group, the Shetty family, who maintain a significant equity stake.
- Strategic Focus: Management’s strategic shift towards an asset-light model and the divestment of the fuel business enhance strategic focus.
- Financial Improvement: Operational performance improved in FY25, showing higher revenues, better margins, and improved leverage, with overall gearing at 1.75x in FY25.
Key Weaknesses and Sensitivity
The strengths are partially offset by:
- Revenue Concentration: A significant portion of revenue, approximately 64% in FY25, is concentrated in the Surface Express business.
- Margin Pressure: The express and part-truckload segment faces intense competition, leading to persistent pricing pressure and limiting profitability.
- Debt Coverage: Debt coverage indicators were moderate, marked by a total debt/GCA of 13.82x for FY25, due to a sizeable lease liability post-demerger.
The outlook is assessed as Stable, based on the expectation that Allcargo will benefit from the consolidation, leading to financial synergies and improved profitability over the medium term.
Financial Snapshot Post-Restructuring (Briefs)
The financial data provided reflects the business post-demerger of the international supply chain business:
- Total operating income for 9MFY26 (UA) stood at Rs. 1,544 crore, up from Rs. 1,961 crore in FY25 (A).
- PBILDT for 9MFY26 (UA) was Rs. 174 crore, against Rs. 201 crore in FY25 (A).
- Overall gearing improved to 1.75x in FY25 from 1.86x in FY24.
Source: BSE
