India Ratings Affirms Trident's Proposed NCDs at 'IND AA'; Outlook Stable
India Ratings and Research (Ind-Ra) has affirmed Trident Limited's proposed non-convertible debentures (NCDs) rating as 'IND AA' with a 'Stable' outlook. The proposed NCDs have a size of INR 1,250 million and mature at an undisclosed date.Details of Instruments
| Instrument Type | Date of Issuance | Coupon Rate | Maturity Date | Size of Issue (million) | Rating assigned along with Outlook/Watch | Rating Action |
|---|---|---|---|---|---|---|
| Proposed non-convertible debentures* | - | - | - | INR1,250 | IND AA/Stable | Affirmed |
Ind-Ra has changed its rating approach to a fully consolidated view of Trident and its subsidiaries and associate company.
The affirmation reflects Trident's healthy consolidated business profile, resilient operating performance, and healthy credit metrics, which Ind-Ra expects to sustain. With the completion of the capacity expansion programme, the company began deleveraging and will continue to deleverage further. The rating is further supported by sustainable margins in the paper segment and continued government support in the form of fiscal incentives.
Key Rating Drivers
Strengths
- Comfortable credit metrics, likely to improve further over FY26-FY27
- Sustained operational performance in 9MFY26 despite US tariff implications
- Healthy business profile
- Support from fiscal incentives in the textile segment
Weaknesses
- Decline in paper business margins in FY25 and 9MFY26; likely to remain range-bound in the near-to-medium term
- Continued high revenue concentration
- Forex and industry risks
Detailed Description of Key Rating Drivers
Ind-Ra expects the consolidated net adjusted leverage to be 1.50x-1.60x over FY26-FY27. The consolidated interest coverage is expected to sustain above 5.0x over FY26-FY27. Trident’s consolidated gross adjusted debt reduced to INR16.4 billion at FYE25.
In 9MFY26, the consolidated revenue remained stable at INR50.69 billion and EBITDA at INR6.42 billion. Management expects demand from global markets to improve. Ind-Ra expects the revenue to remain at FY25 levels in FY26 and EBITDA to moderate to INR8.5 billion-9.0 billion.
Trident has a leading market share in the global terry towel market. The business profile benefits from a diversified product mix and vertically-integrated operations. Home textiles, yarn, and paper contributed 54%, 31% and 15%, respectively, to the overall revenue in 9MFY26.
Trident receives export incentives and benefits from an interest subsidy in the textile segment.
In 9MFY26, the paper business EBITDA margins reduced to 13.0% on account of raw material costs and reduced capacity utilisations. The company expects these margins to remain at 14%-17% over the near-to-medium term.
The top customer contributed 17.9% to the consolidated revenue in FY25 and the top five customers contributed 36.9%.
Liquidity
The average utilisation of the fund-based limits was low at around 24% for the 12 months ended January 2026. The company had moderate free cash balances of INR5.49 billion at FYE25. Ind-Ra expects the overall cost of debt to remain at 6%-8% over the medium term.
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