India Ratings and Research has revised the credit rating outlook for Sudarshan Chemical Industries Limited’s debt facilities to Positive from Stable, while affirming the ratings. This upgrade reflects the company’s strengthening business profile, improving margins from its acquired business, and robust legacy pigment business performance. The rating agency noted the company’s strategic acquisition and its impact on market position and revenue growth.
Sudarshan Chemical Industries: Credit Rating Outlook Revised to Positive
Sudarshan Chemical Industries Limited has received an upgraded credit rating outlook from India Ratings and Research Private Limited. The agency has revised the outlook on the company’s debt facilities to Positive from Stable, while simultaneously affirming the existing ratings.
Key Drivers for the Revised Outlook
The positive outlook revision is attributed to several key factors identified by India Ratings:
- Strengthened Business Profile: The acquisition of the Heubach group has significantly enhanced Sudarshan Chemical’s market position, making it the second-largest pigment producer globally. This strategic move has nearly tripled the company’s consolidated revenue from FY24 to FY26 and expanded its product portfolio and global reach.
- Improved Margins: The acquired business is expected to achieve EBITDA positivity and see improving margins over FY27-FY28 due to value capture initiatives.
- Robust Legacy Business: Sudarshan’s legacy pigment business continues to demonstrate healthy EBITDA with lower-than-industry volatility, supported by its strong market position and pricing power.
- Non-Core Asset Divestment: The planned divestment of non-core assets is expected to accelerate deleveraging and improve the company’s net debt position.
Affirmed Ratings
India Ratings has affirmed the following ratings for Sudarshan Chemical Industries Limited’s debt facilities:
- Bank loan facilities: IND AA/Positive with IND A1+
- Commercial Paper: IND A1+
- Fixed Deposit: IND AA/Positive
A copy of the detailed report outlining the rationale behind these ratings is available on India Ratings’ website and has been provided herewith.
Source: BSE
