Crisil Reaffirms Rating for Huhtamaki India’s Credit Facilities Amid Operational Strengthening

Crisil Reaffirms Rating for Huhtamaki India’s Credit Facilities Amid Operational Strengthening​

Crisil Ratings has reaffirmed its 'AA-/Stable' rating on the long-term bank loan facilities of Huhtamaki India Limited, reflecting the company's established position in the flexible packaging industry and its strengthening financial risk profile.

The rating pertains to a total of Rs 88 Crore in rated bank loan facilities. The affirmation by CRISIL reflects the company’s strong liquidity and operational resilience despite operating in a highly competitive market.

Financial Performance and Stability​

Crisil Ratings noted that while operating income declined by approximately 2% to Rs 2,469 crore in the calendar year 2025 from Rs 2,521 crore in 2024, Huhtamaki India Limited (HIL) significantly improved its profitability profile. The company's operating margin improved notably to 7.7% in 2025 from 4.6% in 2024.

In the first half of 2026 (H1CY26), revenue saw a significant year-on-year increase of about 12%, reaching Rs 1,322 crore compared to H1CY25. The margin for H1CY26 improved to 8.4% from 6.4% in the first half of 2025.

The company maintains a healthy financial risk profile, supported by a networth of Rs 1,228 crore and total debt of Rs 213 crore (which includes external commercial borrowings from the parent, lease liabilities, and vendor financing) as of December 31, 2025, resulting in a gearing ratio of less than 0.17 times.

A summary of key financial indicators for HIL is provided below:

Operational Strengths and Risk Exposure​

HIL is an established player in the domestic flexible packaging market, with a diversified product range including flexibles, labels, tube laminate, and cylinders. The company's business risk profile is supported by its strong customer base and its parent’s operational and financial backing. Huhtamaki has provided support through product development and financial assistance, having extended external commercial borrowings amounting to Rs 200 crore (with an outstanding balance of Rs 100 crore as on December 31, 2025) and providing corporate guarantees for some of HIL's banking facilities.

However, the company remains exposed to intense competition within the fragmented flexible packaging industry and various regulatory risks. Furthermore, susceptibility to volatility in raw material prices persists, with raw material costs accounting for 65-70% of operating income.

On a positive note regarding liquidity, HIL enjoys strong cash positions; cash and equivalent along with current investments remained over Rs 400 crore as of June 30, 2026.

ESG Profile and Outlook​

The ESG profile of HIL supports its credit risk profile. The company aims to achieve carbon neutrality by 2030. In 2025, the share of renewable energy in its overall energy mix increased to approximately 11% from 7% the previous year. Operational health indicators also showed improvement, with the employee attrition rate standing at about 9% in 2025 and the lost time injury frequency rate for employees reducing to nil in 2025, down from 0.42 in 2024.

Crisil Ratings maintains a stable outlook on HIL, believing that the company will benefit from the operational and financial support of Huhtamaki in the medium term.

Facility Details​

The rated instrument details are as follows:

HUHTAMAKI Stock Price Movement​

Shares of Huhtamaki India Limited slipped on Wednesday, shedding 4.34% to settle at ₹279.00 after trading off a previous close of ₹291.65. The stock saw a total traded volume of 266,172 shares during the session.