Submission of Credit Rating Letter issued by India Ratings and Research (Ind-Ra) with respect to Company''s Bank loan facilities

CONL CHEMFAB ALKALIS LIMITED REF: CHEMFAB/SEC/2026-2027 08" October 2026 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department The Manager, Listing Department Phiroze Jeejeebhoy Towers, “Exchange Plaza” Dalal Street, Bandra - Kurla Complex, Bandra (E) Mumbai- 400 001. Mumbai - 400 051 BSE — Scrip Code: 541269 NSE Symbol: CHEMFAB Sub: Intimation of Credit Rating under Regulation 30 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015. Pursuant to Regulation 30 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015, we wish to inform you that “India Ratings and Research” has affirmed the following rating in respect of the Company’s bank loan facilities’. Instrument Regulator Date of Coupon Maturity Size of Rating Assigned Rating Type of Issuance Rate Date Issue with Action Instrument (INR Outlook/Watch million) Bank loan RBI - - - 1700 IND Affirmed facilities BBB+/Negative/IND We are also enclosing the credit rating letter issued by India Ratings and Research (Ind-Ra). Request you to kindly take the above information on record. Thanking You, Yours Faithfully, For CHEMFAB ALKALIS LIMITED Bharatraj Panchal Company Secretary F9828 Regd. Off: TEAM House', GST Road, Vandalur, Chennai - 600 048, India oo o 0% 01 e Plant: “Gnanananda Place”, Kolapet, Puduch-e 60r5 r01y4, India Ph - 491 413 2685111, e OHEAS 101 1501 o oy E-mail: chemfabalkalis@dmaoholdings com, www.chemfabalkalis.com IndiaRatings India Ratings Affirms Chemfab Alkalis' Bank Loan facilities at ‘IND BBB+'/Negative Oct 07, 2026 | CHEMFAB ALKALIS LIMITED | Commodity Chemicals India Ratings and Research (Ind-Ra) has affirmed Chemfab Alkalis Limited’s (CAL) bank loan facilities’ rating as follows: Details of Instruments Si f Instrument Regulator of Date of Coupon Maturity Isslliee(TNR Rating Assigned with Rating Type Instrument Issuance Rate Date . Outlook/Watch Action million) Bank loan - RBI - - - 1700 BBB+/Negative/IND | Affirmed facilities A2 Analytical Approach Ind-Ra continues to take a fully consolidated view of CAL and its two wholly owned subsidiaries, Chemfab Karaiikal Limited (CKL), and Chemfab Hiitech Piping Limited (CHPL), to arrive at the ratings in view of the strong operational and strategic linkages between them. CHPL was incorporated in October 2025 and is yet to commence operations. Detailed Rationale of the Rating Action The Negative Outlook reflects slower-than-expected recovery in CAL’s consolidated operating performance in FY26 and 1QFY27, owing to prolonged weakness in the oriented polyvinyl chloride (OPVC) pipe business. While the entity has made significant investments towards capacity expansion over FY24-FY27, lower-than-expected demand related to the Jal Jeevan Mission (JJM) has resulted in continued underutilisation of capacities, resulting in a fall in the revenue and EBITDA. However, the affirmation reflects Ind-Ra’s expectation of a meaningful recovery in operating performance over the next few months and the availability of some liquidity buffer in the form of undrawn bank lines for this period. With a yoy increase in fund allocations and release towards JJM in 1HFY27, CAL's pipes order book has witnessed early signs of recovery. The company had an order book of around INR170 million at end-September 2026 (a large part of which is likely to be executed in October 2026), representing a significant improvement from revenue levels of INR57.5 million in 1QFY27, translating into a monthly average of around INR20 million. Ind-Ra also understands from the management that the potential project pipeline has improved significantly, backed by some traction in JJM as well as non-JJM government projects. Accordingly, Ind-Ra expects a meaningful recovery in the pipes segment 2HFY27 onwards. The agency will continue to monitor the progress of order booking and execution closely over the next few months, as any further delay in recovery, leading to lower-than-expected EBITDA generation, would be negative for the ratings, given its criticality in deleveraging and cash flow generation. Furthermore, Ind-Ra draws some comfort from the sanction of incremental capex reimbursement borrowings of INR555 million in 1HFY27 at competitive rates, indicating the company’s reasonable financial flexibility despite the weakness in performance. Of the sanctioned term loan, CAL has drawn INR400 million in 1HFY27, with the balance to be drawn over 2HFY27, providing some liquidity cushion. This, coupled with unused fund-based working capital lines of INR120 million- 130 million at end-September 2026 provides sufficient liquidity for near-term debt servicing obligations. CAL has additional on-tap liquidity in the form of an unsecured credit line of INR200 million approved by the board of directors of its associate entity, Team Hiitec Eqpt Private Limited (THEPL). THEPL had extended inter-corporate deposits (ICDs) of INR110 million to CAL in 4QFY26, which was repaid in 1HFY27 after the external loans were availed. Ind-Ra understands from the management that THEPL has adequate liquidity buffers to extend the approved loan to CAL as and when required. However, Ind-Ra will continue to monitor CAL’s liquidity position closely, as any reduction in liquidity buffers could be negative for the ratings. The chlor-alkali segment witnessed a meaningful improvement in 1QFY27, aided by a rise in prices and the commissioning of the membrane electrolyser and power-efficiency initiatives, whose benefits started yielding from 1QFY27. This helped to partially mitigate the weak performance of other segments. While caustic soda prices have corrected materially in 2QFY27, Ind-Ra believes that the cost efficiency measures are likely to result in continued yoy improvement in the segment’s profitability. List of Key Rating Drivers Strengths « Diversified product mix « Cost reduction initiatives in chemicals to support EBITDA and cash flow generation Weaknesses « Low order inflow in OPVC pipe business delaying EBITDA recovery « Credit metrics weakened in FY26; recovery remains contingent on earnings improvement Detailed Description of Key Rating Drivers Diversified Product Mix: CAL operates in the chlor-alkali chemicals and OPVC pipes segments, thereby benefiting from diversification across products and end-markets. While chemicals had accounted for 74%-88% of the revenue during FY20-FY23, the revenue mix became more balanced in the subsequent period due to the expansion of the pipe business. Pipes contributed 38%-39% to the revenue during FY24-FY25. In FY26, CAL's revenue decreased to INR3,110 million (FY25: INR3,344 million); chemicals contributed INR2,176 million to the total revenue in FY26 (70%) and OPVC pipes contributed INR935 million (30%). The revenue share of pipes in FY26 fell due to weak JJM-linked demand, which accounted for majority of the company’s pipe business. The trend further intensified in 1QFY27, with chemicals contributing INR674 million (92%) to the revenue due to an improvement in prices, while the pipe segment contributed only INR57 million (8%), with minimal order inflows. The benefit of the diversification also helped the company’s overall profitability, as the recovery in the chemical segment mitigated the impact of the EBIT losses in the pipe segment. Despite the likely near-term slowdown, the pipe business remains a key growth driver. Given some traction in JJM orders, and the management's focus on non-JJM government and private-sector projects, the pipe segment's revenue share is likely to recover over the medium term. Cost Reduction Initiatives in Chemicals to Support EBITDA and Cash Flow Generation: CAL completed the replacement of one of its two electrolysers during FY26, replacing a 1994-vintage unit with a modern membrane electrolyser. Electrolysers are a critical component in caustic soda production, serving as the core unit, wherein electricity drives the decomposition of purified brine into caustic soda, [Showing first 8,000 characters — download PDF for full document]