Gensol Engineering Ltd addresses recent Credit Rating Downgrades and Outlines Strategic Debt Reduction Plan

Gensol Engineering Limited (GEL) acknowledges the recent credit rating downgrades by CARE and ICRA. The rating downgrade happened due to short-term liquidity mismatch which is improving by way of customer payments. That said, we understand the concerns these downgrades have raised and are committed to addressing them responsibly to all our stakeholders.

Further, we deny any involvement in falsification claims and would be setting up a committee to comprehensively review the matter. This underscores company's commitment to accountability, transparency and sustainable business practices.

We would like to reinforce that the company has reported strong growth in key financial parameters across the board.

1. Orderbook of more than INR 7000 Cr. imparting significant revenue visibility
2. Total Revenue has grown by 42% to INR 1,056 Cr. in 9M FY25.
3. EBITDA has grown by 89% to INR 246 Cr. in 9M FY25
4. PAT has grown by 34% to INR 67 Cr. in 9M FY25

These are challenging times, and we are taking decisive steps toward strengthening our financial position and ensuring long-term financial stability. Below is a short summary of our current debt profile and key action items:

Current Debt:

1. In GEL standalone, the current fund-based capital limit for Solar EPC stands at INR 249 Cr.
2. In GEL standalone, the term loan for EV vehicles stands at INR 645 Cr.
3. In the EV leasing subsidiary company, the current term loan stands at INR 252 Cr.
4. The total current debt stands at INR 1146 Cr. against the reserves of INR 589 Cr. making it a debtequity ratio of 1.95
5. In the current financial year, we have reduced our debt obligation by ~INR 230 Cr.

Strategic Deleveraging: We have initiated a series of asset divestments to significantly reduce our debt:

1. The sale of 2,997 electric vehicles worth INR 315 Cr.
2. The sale of a wholly owned Gensol subsidiary company for INR 350 Cr.
3. As a result of these two divestments, our debt will significantly reduce by INR 665 Cr. resulting in a debt-equity ratio of 0.8.

While the company continues to pay its debt obligations, all proceeds from the above initiatives will be directly utilized toward repaying our existing debt and working capital obligations.

Through these periodic interventions and upcoming planned initiatives, we are resolute in our goal of achieving a zero net-debt status.

We are confident in our ability to navigate this period and emerge stronger. We value the trust of our stakeholders and will provide regular updates as we progress towards our financial goals.

Shares of Gensol Engineering Ltd was last trading in BSE at Rs. 372.60 as compared to the previous close of Rs. 413.95. The total number of shares traded during the day was 20275 in over 1301 trades.

The stock hit an intraday high of Rs. 372.60 and intraday low of 372.60. The net turnover during the day was Rs. 7554465.00.

Source : Equity Bulls

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GensolEngineering INE06H201014 CreditRatingDowngrade Updates