India Ratings Assigns 'IND A-' Credit Rating to Trualt Bioenergy Ltd's Bank Facilities

India Ratings Assigns 'IND A-' Credit Rating to Trualt Bioenergy Ltd's Bank Facilities​

India Ratings and Research (Ind-Ra) has assigned a credit rating to Trualt Bioenergy Limited's (TBL) bank facilities, rating the company's debt at IND A-/Stable/IND A2+. The rating assignment, which focuses on TBL's strong market position and growth prospects in the bioenergy sector, highlights the company's scale as India's largest cane-based distillery.

According to India Ratings, TBL's bank facilities were assigned the following rating:


The rating reflects a fully consolidated view of TBL and its subsidiaries, Leafiniti Bioenergy Private Limited (LBPL) and Trualt Gas Private Limited (TGPL), acknowledging the strong operational and strategic linkages among the group entities.

Operational Strength and Diversification Strategy​

TBL’s market leadership is supported by its distillery capacity, which has increased to 2,000klpd. The company also plans to transition 1,300klpd of its capacity to dual feed integration in 3QFY26, a move expected to maximize production efficiency.

Furthermore, TBL is aggressively expanding its capacity in Compressed Biogas (CBG). The company plans a capital expenditure (capex) of INR10.5 billion over FY26 to FY28 to establish around 21 CBG plants in its subsidiaries through joint ventures (JVs) with GAIL and Sumitomo Corporation. One CBG unit in LBPL is already operational, generating healthy margins.

The company’s large order book provides strong visibility for significant growth in ethanol sales volume, with the allocation from OMCs and private players increasing over 3.5x year over year for ESY25.

Financial Performance and Outlook​

TBL's consolidated revenue grew 13% year over year (yoy) to INR11.2 billion, and EBITDA jumped 10% yoy to INR1.9 billion in 9MFY26.

India Ratings anticipates that the company’s credit metrics are likely to improve materially in FY27, driven by the healthy order book in ethanol and the anticipated EBITDA generation from the CBG business. The presence of an escrow mechanism, where revenue from ethanol sales to OMCs is credited, provides comfort for debt servicing.

The rating analysis notes several key factors contributing to TBL's profile:

• Strengths: TBL is recognized as the largest ethanol player with high revenue visibility due to its strong order book. Molasses sourcing risk is largely mitigated by group company procurement, and the CBG segment shows healthy margins supported by offtake agreements.
• Weaknesses: The analysis pointed out that a lack of price hike in sugar-based ethanol could weigh on profitability, and the grain-based ethanol margins are structurally susceptible to feedstock price fluctuations.

While Ind-Ra expects the CBG capex to raise the net debt to INR18 billion to INR19 billion in FY27-FY28, the projected EBITDA from the ethanol and CBG businesses is expected to keep the net leverage below 3.5x from FY27 onwards.

The financial indicators for the past years illustrate the company's growth momentum:


The company’s profitability for ethanol producers remains linked to raw material prices and government policies, while the CBG segment's ability to ramp up volumes and maintain EBITDA margins remains a critical monitorable factor.

TRUALT Stock Price Movement​

As of 12:37 PM, shares of TruAlt Bioenergy Limited are slipping by 2.71% in live trading, currently trading at ₹464.5. The stock shed ₹12.95 in the live market, with 257,376 shares transacting so far in the session.