CRISIL Revises Sukhjit Starch & Chemicals Ltd Ratings; Long-Term Credit Rating Adjusted

CRISIL Revises Sukhjit Starch & Chemicals Ltd Ratings; Long-Term Credit Rating Adjusted​

Sukhjit Starch & Chemicals Limited (SSCL) saw its long-term credit rating for bank facilities and fixed deposits revised by CRISIL. The company's short-term rating was reaffirmed, as part of the updated assessment of its business and financial risk profile.

CRISIL Ratings downgraded the long-term rating for total bank loan facilities and fixed deposits, while reaffirming the short-term rating. This revision followed SSCL reporting lower-than-expected revenues in fiscal 2026 amid subdued realization trends.

Rating Action Overview​

The ratings action covered both short and long-term instruments, reflecting shifts in profitability and debt protection metrics for the company.

Key data from the rating agency is summarized below:

Financial Performance and Risk Profile​

The rating decision factored in the company’s operational performance, which saw a decline in profitability during fiscal 2026. SSCL reported revenues of Rs 1,425 crore for fiscal 2026, with revenue expected to remain flat between Rs 1,400–1,500 crore in fiscal 2027 due to subdued realizations.

Operating profitability was estimated to decline to 5.26% during fiscal 2026 from 6.9% in fiscal 2025 and significantly missed previous expectations of 8-9%. Consequently, net cash accruals were recorded at approximately Rs 59 crores for fiscal 2026, falling short of the earlier estimate of Rs 100–120 crore.

The ratings also addressed debt protection metrics. The interest coverage ratio stood at 2.5 times for fiscal 2026 compared to 3.6 times in fiscal 2025. Despite the anticipated stabilization of operating profitability over the medium term, sustained improvement in these financial risk profiles remains a key focus for the rating agency.

Operational Strengths and Weaknesses​

CRISIL noted that SSCL maintains a strong market position as a leading manufacturer of starch and its derivatives in the domestic maize processing industry. The company operates a maize grinding capacity of 1,600 tonnes per day (TPD).

The company’s strengths include:

• Strong Market Position: Established since 1943, SSCL benefits from strategic facilities across North, South, and Eastern India, enabling competitive procurement of raw material. The business is supported by the industry experience of the Sardana family.
• Diversified Clientele: Revenue depends on product mix across paper, packaging, and food and beverages industries. The top five customers contributed 16% to overall revenue in nine months of fiscal 2026, including reputed clients such as Dabur India Ltd, Mars Wrigley India Pvt Ltd, Nestle India Ltd, Zydus Wellness Products ltd and Marico Ltd.
• Healthy Capital Structure: As of March 31, 2026, the gearing ratio was 0.5 times, supported by a net worth of Rs 590.5 crores for fiscal 2026.

Conversely, the ratings identified vulnerabilities related to operational margin and debt protection. A primary weakness is the susceptibility of operations to raw material price volatility, as the cost of maize constitutes 70% of the operating income. The company's moderate dependence on working capital limits also resulted in modest debt protection indicators, necessitating a sustained improvement in these metrics for strengthening the financial risk profile.

Key Financial Indicators (As on/for period ended March 31)​

The following table provides key financial metrics for SSCL:

SUKHJITS Stock Price Movement​

Today, shares of Sukhjit Starch & Chemicals Limited edged higher to settle at ₹173.05 after closing up 2.08% on the day. The stock traded within a range of ₹171.00 to ₹178.98, with total traded volume reaching 21,403 shares.