Coastal Corporation Limited has announced that CARE Ratings Limited has reviewed and assigned new credit ratings as well as reaffirmed previous ones for the company's bank facilities. The long-term bank facilities amounting to ₹68.28 crore have been assigned a 'CARE BB; Stable' rating. Additionally, long-term/short-term bank facilities totaling ₹13.50 crore have been assigned a 'CARE BB; Stable / CARE A4' rating. Furthermore, existing long-term/short-term bank facilities of ₹260.00 crore (enhanced from ₹234.00 crore) have been reaffirmed with a 'CARE BB; Stable / CARE A4' rating. The rating rationale highlights improved revenue from operations in FY25 and 9MFY26, despite a decrease in profitability margins in FY25 due to countervailing duties by the US and increased input costs. Profitability improved in 9MFY26 with better realisations and lower raw material costs. The company's revenue saw a significant increase of approximately 45% year-on-year in FY25, driven by a 48% surge in production volumes from its third processing unit. 9MFY26 revenue has already surpassed FY25 levels. The ratings are further supported by an experienced management team, moderate operational performance, geographical advantages in the aquaculture zone, improvement in the ethanol business, and a stable industry outlook. Key rating sensitivities include an improvement in overall gearing to below 1.0x and Total Debt to Gross Cash Accruals (TD/GCA) below 3x for positive action, and deterioration in overall gearing beyond 1.50x or a significant decline in Total Operating Income (TOI) and PBILDT margins for negative action. The company's consolidated financial risk profile includes its wholly-owned subsidiaries: Continental Fisheries India Private Limited, Seacrest Seafoods Inc. (USA), and Coastal Bio-Tech Private Limited. The company's capital structure deteriorated as of March 31, 2025, with overall gearing increasing to 1.57x from 1.28x in FY24, primarily due to higher total debt. Working capital borrowings remain high, and a term loan for the ethanol plant capex and capacity upgradation has also contributed to the debt. Coverage indicators have moderated due to higher interest costs. The company faces geographical concentration risk, with approximately 84% of its total income from exports to the US, making it vulnerable to changes in US trade policies. To mitigate this, CCL is diversifying its markets to China, Russia, Japan, and Europe and has formed strategic partnerships. The operating cycle remains elongated and working capital intensive, with the working capital cycle increasing to 153 days in FY25 from 111 days in FY22, partly due to higher inventory levels caused by Red Sea crisis rerouting. The seafood industry is highly competitive and subject to stringent regulations and quality requirements from importing countries. Profitability is also influenced by export incentives and forex fluctuations. The company is also exposed to disease-prone industry conditions and climatic vagaries, though Vannamei shrimps are more resistant. The ethanol plant project experienced delays and a cost overrun of ₹35 crore but contributed approximately ₹103 crore to revenue and ₹3.7 crore to Profit After Tax (PAT) by December 2025, with an expected revenue of ₹230 crore in FY26. The company's liquidity position is considered stretched due to incremental debt levels, but it is supported by improved profitability and adequate cash balances. The maximum utilization of fund-based working capital limits was 84% for the 12 months ended February 2026. A term loan under the CGSE scheme in December 2025 provides near-term liquidity support.
