Credit Rating

October 09, 2026 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Bandra – Kurla Complex, Dalal Street, Bandra East, Mumbai – 400 001 Mumbai – 400051 Scrip Code: 543416 Symbol: ZODIAC Sub: Announcement under Regulation 30 read with Para A of Schedule III of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Dear Sir/Madam, Pursuant to Regulation 30 read with Para-A of Schedule III of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, We wish to inform you that CARE Ratings Limited, Credit Rating Agency has assigned the revised Credit Rating on Bank Loan Facility of the Company as per the below table: Facilities Amount (Rs. in Rating Rating Action Crores) Long Term / Short Term Bank 71.55 CARE BBB; Stable/ Reaffirmed Facilities (Enhanced from 63.55) CARE A3+ Long Term Bank Facilities 115.95 CARE BBB; Stable Reaffirmed (Reduced from 121.95) Long Term Bank Facilities - - Withdrawn Short Term Bank Facilities 1.50 CARE A3+ Reaffirmed Copy of Letter of Credit Rating for bank facilities issued by CARE Ratings Limited is enclosed below. The aforementioned information is also available on the website of the Company i.e. www.zodiacenergy.com. You are requested to kindly note the same. Thanking you, Yours faithfully, For Zodiac Energy Limited Divya Joshi Company Secretary & Compliance Officer Place: Ahmedabad Encl: A/a Press Release Zodiac Energy Limited October 08, 2026 Name of the Rating Facilities/Instruments Amount (₹ crore) Rating2 Regulator1 Action Long-term / Short-term bank 71.55 CARE BBB; Stable / RBI Reaffirmed facilities (Enhanced from 63.55) CARE A3+ 115.95 Long-term bank facilities RBI CARE BBB; Stable Reaffirmed (Reduced from 121.95) Long-term bank facilities RBI - - Withdrawn Short-term bank facilities RBI 1.50 CARE A3+ Reaffirmed Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Ratings assigned to bank facilities of Zodiac Energy Limited (ZEL) continue to derive strength from growing scale of operations and moderate profitability supported by presence in Independent Power Purchase (IPP) segment, experienced promoters with established track record of solar power project execution on engineering, procurement, and engineering (EPC) basis, and adequate liquidity. However, these rating strengths are partially offset by moderate order book position, working capital intensive operations, and moderate financial risk profile. Ratings also take cognisance of sizeable equity commitment towards ZEL’s solar project special purpose vehicles (SPVs), funding pattern, which shall remain crucial for the company’s financial risk profile. Ratings also consider profitability susceptible to volatility in solar module prices and its presence in a fragmented and highly competitive industry. The rating assigned to cash credit facility has been withdrawn since this limit has not been renewed per the latest sanctioned letter of the lender. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Growth in total operating income (TOI) above ₹600 crore while maintaining the present profitability level. • Improvement in capital structure marked by overall gearing below 1.50x. Negative factors • Moderation in capital structure marked by overall gearing above 2x on a sustained basis. • Deteriorating credit risk profile of the off taker with delay in receiving payments. • Gross current asset (GCA) days above 180 days on a sustained basis. Analytical approach: Standalone while factoring its equity commitments towards its SPVs, and support, if any, required during construction and operational phase. Outlook: Stable Stable outlook reflects CARE Ratings Limited’s (CareEdge Ratings’) expectation that ZEL shall continue to benefit from extensive experience of its promoters resulting in sustained order execution. Stable outlook also reflects benefits derived from long-term power purchase agreement (PPA) with a strong counterparty, for its IPP project. Detailed description of key rating drivers Key strengths Growing scale of operations and moderate profitability ZEL maintained a strong growth trajectory in FY26, with revenue rising ~38% year-on-year (y-o-y) to ₹543.52 crore, supported by robust order execution and buoyant solar demand. Momentum strengthened in Q1FY27, with revenue growing ~45% y-o-y to ₹141.81 crore. 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority. 2Complete definitions of ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release Profitability also improved, marked by profit before interest, lease rental, depreciation and tax (PBILDT) margin expanding 120 bps to 10.28% in FY26, and further to 10.62% in Q1FY27, partially aided by the higher-margin IPP business. Consequently, the company’s gross cash accruals improved from ₹26.31 crore in FY25 to ₹38.69 crore in FY26. Other return indicators continue to remain healthy marked by return on capital employed (ROCE) and return on net worth (RONW) of 15.56% and 19.76%, respectively, (19.99% and 27.66%, respectively, in FY25). With healthy sector prospects, stable IPP income and growth in trading operations, CareEdge Ratings expects revenue to grow ~35-40% in FY27, with sustained profitability. ZEL commissioned 26.56 MWp (AC capacity) solar power assets across 12 sites in Gujarat under Renewable Energy Service Company (RESCO) model in a phased wise manner in H1FY26. It has 25-year PPA with Uttar Gujarat Vij Company Limited (UGVCL) at a tariff rate of ₹3 per Kilo Watt hour, providing revenue stability. The company reported plant load factor (PLF) of over 22% across all sites and revenue of ₹15.58 crore in FY26. Experienced promoters with demonstrated track record of operations in solar EPC segment Kunj Shah, Managing Director (MD), has an established track record of over three decades in design, supply, installation, testing, commissioning, and operation and maintenance (O&M)of power assets on EPC basis. Kunj Shah looks after the overall business and is responsible for strategy and planning, finance, investments, and operations. He is ably supported by experienced professionals. The proven track record enables company to bid for complex projects (including canal top and floating solar), in domestic and overseas market. ZEL has installed 500+ MW of solar power projects catering to over 16,000 clients across 15+ states in India and Africa. Key weaknesses Moderate orderbook position, resulting in near-term revenue visibility ZEL’s order book stood at ₹208.32 crore as on September 9, 2026, executable over 6-12 months, providing near-term revenue visibility. The order book moderated from ₹394 crore as on May 31, 2025, largely following the completion of a major order of ~₹154-crore in Q1FY27. Given the fragmented, small-ticket, and short-tenure nature of orders, the order book witnesses a continuous churn, and the company’s ability to sustain a continuous order procurement remains crucial from credit perspective. Orders from ZEL’s SPVs constitute ~49% of the current order book, while the balance includes external clients including reputed customers. Moderate financial risk profile ZEL’s financial risk profile continues to remain moderate, as indicated by an overall gearing and a total outside liabilities to tangible net worth (TOL/TNW) of 1.86x and 3.06x, respectively, as of March 31, 2026 (1.81x and 2.48x at previous year end). The company’s debt largely comprises term loans tied to its IPP solar asset and working capital borrowings under its EPC operations. High working capital intensity (in EPC business) and a moderate net worth base (of ₹116.82 crore on March 31, 2026), results in sizeable reliance on external borrowings and el [Showing first 8,000 characters — download PDF for full document]