Filing of Crisil Rating for Bank Facilities

Ambika Cotton Mills Limited 30/07/2026 Ref.No. ACM/SE/13/2026-27 LISTING COMPLIANCE DEPARTMENT BSE Limited The National Stock Exchange Phiroze Jeejeebhoy of India Ltd. Exchange Tower, Dalal Street, Plaza, Plot No. C/1, G Block, Mumbai – 400001 Bandra Kurla Complex, Bandra Scrip Code: 531978 (E), Mumbai – 400051 Symbol: AMBIKCO Dear Sir, Regulation 30 of SEBI (LODR) Regulations, 2015 – Filing of CRISIL Rating for bank facilities – Revision in Rating - Reg. Please find CRISIL rating for bank facilities and was filed by CRISIL directly with BSE and in respect of the same auto notification came from BSE. A copy downloaded from BSE portal is filed for record. It may be noted that short-term rating upgraded to CRSIL A1+ and long-term rating CRISIL A+/ Stable (Re- affirmed)and we yet to receive the official copy from CRISIL. Thanking you For Ambika Cotton Mills Limited Radheyshyam Padia Company Secretary & Compliance Officer Reg Office: 15/ 9A, Valluvar Street, Sivanandha Colony, Coimbatore- 641012 Phone No : 0422-2491501/2491502 Fax No : 0422-2499623 e Mail : ambika@acmills.in website : www.acmills.in CIN: L17115TZ1988PLC002269 7/30/26, 11:09 AM Rating Rationale Crisil Ratings Rating Rationale July 28, 2026 | Mumbai Ambika Cotton Mills Limited Short-term rating upgraded to 'Crisil A1+'; Long-term rating reaffirmed Rating Action Regulator Of Total Bank Loan Facilities Rated Rs.455.55 Crore Instrument Long Term Rating Crisil A+/Stable (Reaffirmed) RBI Short Term Rating Crisil A1+ (Upgraded from 'Crisil A1') RBI Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to Annexure for Details of Instruments & Bank Facilities Detailed rationale Crisil Ratings has upgraded its rating on the short-term bank facilities of Ambika Cotton Mills Limited (ACML) to ‘Crisil A1+’ from ‘Crisil A1’ and has reaffirmed its ‘Crisil A+/Stable’ rating on the long term bank facility. The upgrade reflects the sustained improvement in the company’s liquidity and strengthening financial flexibility over the three fiscals ended March 31, 2026. The company has consistently maintained a strong net cash position, which increased to around Rs 198 crore as of March 2026 from Rs 135 crore as of March 2024. This improvement was supported by healthy cash accrual, prudent working capital management, and limited dependence on external borrowings, resulting in enhanced liquidity and a stronger balance sheet. Furthermore, the management has articulated its commitment to maintaining a minimum free liquidity buffer of ~Rs 150 crore over the medium term. The availability of such sizeable unencumbered cash and liquid investments is expected to provide adequate financial flexibility to meet operational requirement, working capital needs, and any unforeseen contingencies. Additionally, the company remained debt-free as on March 31, 2026, with no outstanding external borrowings on its balance sheet. Over the medium term, the management does not envisage any requirement for major long-term borrowings as the planned capital expenditure (capex) and operational requirements are expected to be funded through internal cash generation. The ratings continue to reflect extensive experience of the promoter, established market position in the finer cotton yarn segment, longstanding relationships with key customers, healthy operating efficiency, and strong financial risk profile. These strengths are partially offset by susceptibility of ACML to volatility in raw material prices and foreign exchange (forex) rates. Analytical approach Crisil Ratings has evaluated the standalone business and financial risk profiles of ACML. Key Rating Drivers - Strengths - - - - Established market position in the finer count yarn segment: The company benefits from its established market position and global repute as a manufacturer of premium cotton yarn, supported by the extensive experience of its promoter, longstanding supplier and customer relationships, and strong in-house operational capabilities. ACML specialises in manufacturing premium quality compact yarn by optimal blending of imported and indigenous cotton, which is used to make finer shirting. In fiscal 2026, the company clocked revenue Rs 780 crore against Rs 721 crore in fiscal 2025. Healthy operating efficiency: Manufacturing premium quality yarn has led to better price realisation, flexibility to pass on increases in raw material prices to customers, and adequate captive power facilities, resulting in reduced power costs. The company’s compact yarn has higher realisation compared to the domestic cotton yarn. The operating margin improved marginally in fiscals 2025 and 2026 to 14–15%. Additionally, prudent working capital management has resulted in healthy return on capital employed of 10% over the three fiscals through 2026. Comfortable financial risk profile: Networth and total outside liabilities to tangible networth (TOLTNW) ratio were comfortable at Rs 954 crore and 0.16 time, respectively, as on March 31. 2026. Debt protection metrics were strong, with interest coverage ratio of around 9 times for fiscal 2026. Strong liquidity is reflected in sparsely utilised bank limit and healthy cash accrual against no major debt obligation. Key Rating Drivers - Weaknesses - - - - Susceptibility to volatility in raw material prices and forex rates: Cotton is a key raw material, accounting for most of the company's turnover. Cotton prices are volatile because they depend on the monsoon. The prices are also affected by international demand. Volatility in availability and prices of cotton affects operating margin, as reflected in decline in the https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/AmbikaCottonMillsLimited_July 28_ 2026_RR_398064.html 1/7 7/30/26, 11:09 AM Rating Rationale company’s margin in fiscal 2024. Moreover, exports account for around 70% of ACML’s turnover, thereby exposing the company to considerable volatility in forex rates. Liquidity Strong Bank limit utilisation was low at around 4.81% for the 12 months through March 2025. Cash accrual is expected to be over Rs 100 crore per annum over the medium term post-dividend, and will aid liquidity in the absence of any debt obligation. The company also has free cash and equivalent of around Rs 198 crore as of March 2026, which support the liquidity; and the management has indicated that minimum free liquidity of Rs 150 crore will be maintained over the medium term. Current ratio was adequate at 6.43 times as on March 31, 2026. Outlook Stable Crisil Ratings believes ACML will maintain its business performance over the medium term, supported by its established market position in the textiles segment and strong operating efficiency. Rating sensitivity factors Upward factors: • Healthy revenue growth and operating margin sustained over 19% leading to higher net cash accrual • Sustenance of the financial risk profile and liquidity Downward factors: • Large debt-funded capex or stretch in working capital cycle resulting in TOLTNW ratio of more than 1.5 times or weakening of liquidity • Decline in revenue or operating profitability impacting cash accrual About the company Incorporated as a private limited company in 1988, ACML was reconstituted as a public company in 1994. Mr PV Chandran is the Chairman and Managing Director. The company spins cotton yarn in the finer count of 60s-100s and manufactures fabric. While ~75% of the revenue is derived from exports, the rest is from the domestic market. ACML is listed on the National Stock Exchange and the Bombay Stock Exchange. Key financial indicators As on / for the period ended March 31 2026 2025 Operating income Rs crore 780.95 721.00 Reported profit after tax (PAT) Rs crore 71.56 65.74 PAT margin % 9.16 9.12 Adjusted debt/adjusted networ [Showing first 8,000 characters — download PDF for full document]