Godawari Power gains after Crisil Ratings revises rating outlook to 'Positive'

Godawari Power and Ispat (GPIL) rose 1.23% to Rs 271.50 after Crisil Ratings revised its outlook on the long-term bank facilities of the company to 'positive' from 'stable' while reaffirming the rating at 'Crisil AA-'.

The rating on the short-term bank facilities has been reaffirmed at 'Crisil A1+.

Crisil Ratings stated that the outlook revision reflects the expected improvement in the business risk profile of the company, driven by increase in revenue and higher backward integration.

The expansion of the iron ore pellet facility to 4.7 million tonne per annum (MTPA) from 2.7 MTPA in December 2025 is expected to support increase in revenue.

Furthermore, receipt of environmental clearance for expansion of the captive iron ore mining capacity at the Ari Dongri mines from 2.35 MTPA to 6.0 MTPA, with production expected to commence by the end of fiscal 2026, will enhance backward integration and reduce dependence on external suppliers.

To expand its core business and new ventures, the company is expected to undertake capital expenditure (capex) of Rs 3,500 crore in this fiscal and the next, wherein it will expand its crushing and beneficiation capacity, set up a cold rolled mill complex, expand solar plant for captive use and enter the battery energy storage system (BESS) segment. These projects will be funded through internal accrual and debt of Rs 1,000-1,200 crore.

The agency noted that the completion of the ongoing capex plans will strengthen the business risk profile and profitability, driven by increase in scale of operations and integrated operations.

The company's strengths are partially offset by exposure to cyclicality in the steel industry and project risk, associated with capex planned over the medium term. Crisil Ratings will monitor any deviation from the expected growth plans and leverage position.

Godawari Power and Ispat has two captive iron ore mines, a pellet plant and a vertically integrated steel plant in Raipur. The steel plant manufactures sponge iron, billets, MS rounds, HB wires, ferroalloys and pre-fab structures.

For the first nine months of fiscal 2026, the company had reported revenue of Rs 3,770 crore and EBITDA of Rs 814 crore, as against Rs 3,908 crore and Rs 880 crore, respectively, during the corresponding period of the previous fiscal.

Powered by Capital Market - Live News