Credit Rating

GujarAaltk aliaensd C hemicalLsi mited (PromobtyGe odv otfG. u jarat) Regd.O ffic&e W ork:sP .OR.a n-o3l9i1 3D5i0sV.ta .d od(aGruaj IaNrDaItA) Phon:e+ 91-265-F6a1x:1+ 19010-02 65-6111012 Websi:tww ew.gaclC.IcNNo Om:L 24110GJ1973PLC002247 Promointg GreeTne chnloogy Ref:.S EC/SE/2026/ 4thA ugust2,0 26 BSE ltd. NationSatlo cEkx changoef I ndiLat d. 1sFtl ooNre,w T radiRnign g I"Ex chanPglea zaC"-,1 B,l oc'kG ' PhiroJzeee jeebhTooyw ers Bandra-KuCrolmap lex DalaSlt reet Sandr(aE ast) MUMBAI: 4 000 01 MUMBAI: 4 000 51 Ref:.C ompanyC odeN o.: G UJALKALI DearS ir/Madam, Sub.F:u rtheIrn timatoifoC nr ediRta tinbgy C ARE RatingLsi mitefdo r- (iL)o ngT ermB ankF acilitoifRe ss. 3 72.6C3r or(eR educefdr om4 82.3C4r ore) (iiS)ho rtT ermB ankF acilitoifRe ss. 339.C5r0o re (iiCio)m merciaPla perI ssuoef R s.10C0r ore Ref.O:u rl ettdeart e3d0 .07.2026 PursuatntoR egulati3o0n r eadw itShc hedulIelo lf P artA ofS EBI( ListOibnlgi gatiaonnds DisclosRuerqeu iremenRtesg)u lati2o0n1s5,( "thLei stiRnegg ulatioansa" m)e,n dedf romt imteo timaen dS EBIM asteCri rculNaor.S EBl/H0/49/14/154-(C7F)D2-0P2OD2/l/3762w/e2 h0a2v6e, submittleedt teirsss uebdyC ARE RatinLgism itoend3 0h1J uly2,0 26. Ina ddititoot nh el ettseurb mittbeytd h eC ompanyw,e aree ncloshienrge witthheR ationfaoltreh e Ratinigsss uebdyt heC areEdgRea tinAgg ency. We requeysotu t ok indtlayk teh ea boveo nr ecord. Thankiynogu , EnclA:s above E-mai.cl o se@cGacl.icno DaheCjo mpl:eP x.OD.a h -e3j9 21T3a0Vi.a. g DriasB,th .a r(uGcuhj IaNrDaItA) Phon:e+ 91-2624516- 613 Press Release Gujarat Alkalies and Chemicals Limited August 03, 2026 Name of the Facilities/Instruments Amount (₹ crore) Rating2 Rating Action Regulator1 372.63 Downgraded from Long-term bank facilities RBI CARE AA-; Stable (Reduced from 482.34) CARE AA; Stable Short-term bank facilities RBI 339.50 CARE A1+ Reaffirmed Commercial paper RBI 100.00 CARE A1+ Reaffirmed Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Revision in the long-term rating of Gujarat Alkalies and Chemicals Limited (GACL) factors in the lower-than-expected improvement in its consolidated financial performance in past two consecutive years ended FY26 (FY refers to April 01 to March 31). The slower- than-envisaged recovery during the period is primarily attributable to moderate caustic soda prices, continued negative chlorine realisations, weaker off-take of downstream products, slower ramp-up of recently commissioned capacities, and slower-than- expected improvement in the operating performance of its joint venture (JV) with National Aluminium Company Limited (NALCO), GACL-NALCO Alkalies & Chemicals Private Limited (GNAL). Revision in rating also factors fructification of negative rating sensitivities considered in the previous review by CARE Ratings Limited (CareEdge Ratings) vide its press release dated August 04, 2025, in terms of profit before interest, lease rentals, depreciation and taxation (PBILDT) margin and total debt to PBILDT. CareEdge Ratings notes that while GACL and GNAL reported a notable improvement in operating profitability in Q1FY27, the sustainability of margins at these levels remains uncertain in view of the volatility in caustic prices, negative chlorine realisations, fluctuations in energy prices, and demand-related uncertainties across downstream products. While consolidated operating profitability and debt coverage indicators are expected to improve in FY27, the extent of recovery is likely to remain below previous expectations. Ratings continue to derive strength from its established position in the domestic chlor-alkali industry along with its integrated operations. Ratings also derive strength from its wide product portfolio catering to diverse end-use industries, diversified energy mix, and its comfortable capital structure despite the consolidation of GNAL and proposed debt-funded capital expenditure in the medium term. The long-term rating continues to be constrained by GACL’s presence in the inherently cyclical chlor-alkali industry and the associated volatility in the electrochemical unit (ECU)3 realisations, susceptibility of its profitability to volatility in energy prices and foreign exchange rates, as well as GACL’s continued propensity to support GNAL’s operations. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Significant volume-driven growth in its scale of operations along with diversification of its operations to other chemical and value-added products thereby insulating itself from the inherent cyclicality of chlor-alkali industry and thus earning healthy PBILDT margin on a sustained basis; along with improvement in consolidated total debt/ PBILDT below 1.50x on a sustained basis. • Gaining significant market leadership position in the caustic soda industry while securing significant portion of its power requirement (its major cost component) through captive low-cost sources. • Improvement in its return on capital employed (ROCE) to more than 15% on a sustained basis. Negative factors • Sustained pressure on its profitability marked by PBILDT margin remaining below 12% on a consolidated basis owing to continued lower ECU realisations on a sustained basis. • Deterioration in consolidated total debt/PBILDT beyond 3.50x on a sustained basis. • Any tightening of prevailing pollution control/ environmental norms and/ or regulatory ban on production and sales of certain major products thereby significantly impacting its business and profitability. 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 the ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 3Caustic soda, chlorine, and hydrogen are co-products and hence ECU refers to weighted average realisations of the above co-products. 1 CARE Ratings Ltd. Press Release Analytical approach: Consolidated. CareEdge Ratings has considered ‘Consolidated’ analytical approach for GACL’s ratings, as there are strong operational and financial linkages of GACL with its JV, GNAL, which has set up a caustic soda manufacturing facility at Dahej, wherein GACL holds a 60% equity stake. Entities consolidated is placed at Annexure-5. GACL has applied the equity method of accounting for its JV, GNAL to arrive at its consolidated financial results while CareEdge Ratings has applied full consolidation of GNAL’s financials to arrive at GACL’s consolidated financial results. Outlook: Stable Stable outlook reflects CareEdge Ratings’ expectation that GACL shall continue to maintain its established position in the domestic caustic soda industry, supported by its integrated operations. CareEdge Ratings expects GACL’s financial risk profile to improve, supported by an expected improvement in the industry scenario and better fixed-cost absorption through incremental revenues in the near-to-medium term. Detailed description of key rating drivers Key strengths Established position in the domestic caustic soda industry which is likely to be maintained GACL is the third-largest producer of caustic soda in the country, with an installed capacity (for caustic soda lye and caustic soda flakes combined) of ~3,000 metric tonne per day (MTPD) as on March 31, 2026, at its plants in Vadodara and Dahej, Gujarat, on a consolidated basis with GNAL. GACL has gradually built a strong position in the industry through continuous expansion of its production capacities to cater to the growing demand for its products over the last four decades. Over the years, GACL has also introduced new chlorine derivatives (downstream products) for higher captive utilisation of chlorine, an essential by-product generated in manufacturing caustic soda. GACL has over 36 products in its basket, enabling it to leverage its large produc [Showing first 8,000 characters — download PDF for full document]