Everest Industries Drops ICRA Ratings Amid Financial Pressures

Everest Industries Limited has requested ICRA Limited to withdraw its credit rating services. ICRA has withdrawn the ratings for the company's bank finance instruments, totaling ₹440 crore. This withdrawal follows the company's voluntary request and has secured a no-objection certificate from its bankers. ICRA stated it has no current information suggesting a change in the company's credit profile since its last review. The company also holds credit ratings from CRISIL, which remain unaffected by this development.

Why This Matters

This move effectively removes ICRA's public assessment of Everest Industries' debt instruments. It occurs shortly after CRISIL had downgraded the company's ratings on similar facilities in November 2025, citing operational and profitability concerns. Investors may interpret this withdrawal as a strategic effort by Everest Industries to control the narrative surrounding its creditworthiness, especially following previous rating agency scrutiny.

Background

In November 2025, CRISIL downgraded Everest Industries' long-term rating to A-/Negative and short-term rating to A2+, impacting ₹440 crore of its bank facilities. This followed weaker-than-expected recovery in business operations and a significant hit to profitability, with EBITDA margins falling to 0.9% in the first half of fiscal 2026. Prior to this, in May 2025, ICRA had also revised EIL's outlook to Negative. This stemmed from sustained pressure on operating margins and increased debt, which weakened its ability to repay loans. Everest Industries' total debt rose to ₹164 crore as of March 2025, up from ₹45 crore a year earlier, leading to a debt-to-equity ratio of 53.6%. The company has faced operational challenges, including lower processing efficiencies, a slow ramp-up at its new Boards and Panel plant, and the execution of lower-margin Pre-Engineered Building (PEB) contracts.

What Changes Now

Shareholders and lenders will no longer have ICRA's independent public assessment for these specific ₹440 crore debt instruments. The primary credit assessment for Everest's bank facilities will now rely solely on CRISIL's ratings, which currently stand at A-/Negative. Greater focus will likely be placed on the company's financial disclosures and its ability to execute strategies aimed at improving operational performance and profitability.

Risks to Watch

Continued pressure on operating margins and overall profitability remains a key concern, as highlighted by recent rating agency reports. Execution risks related to ramping up new plant operations and achieving expected improvements in operational efficiencies. The company's ability to manage its increased debt and financial obligations going forward is also a focus. Potential regulatory risks associated with the use of asbestos in its products, as asbestos fibre is a key imported raw material, are also present.

Peer Comparison

Everest Industries operates in the broader building materials sector. Its closest peers in terms of industry classification include large cement manufacturers like UltraTech Cement, Shree Cement, and ACC Limited. While direct comparisons for rating withdrawal events are rare, these major players generally maintain stronger and more stable credit profiles relative to the financial pressures Everest Industries has recently faced.

Key Metrics Snapshot

CRISIL Rating (Long-term Bank Facilities): A-/Negative as of Nov 2025.
CRISIL Rating (Short-term Bank Facilities): A2+ as of Nov 2025.
EBITDA Margin: 0.9% in H1 FY26.

What to Track Next

Any future rating actions or commentary from CRISIL regarding Everest Industries. Company disclosures on quarterly financial performance, focusing on revenue growth, margin improvements, and operational efficiency. Further announcements from the company concerning asset monetization plans or debt reduction strategies. Management's success in implementing measures to enhance profitability and recover business operations.