Credit Rating Reaffirmation
CARE Ratings Reaffirms Bharat Wire Ropes’ Long-Term BBB+; Stable and Short-Term A3+ Bank Facility Ratings
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Bharat Wire Ropes Limited announced that CARE Ratings Limited has reaffirmed its bank facility ratings, maintaining the CARE BBB+; Stable rating for long-term facilities and CARE A3+ for short-term facilities. The reaffirmation reflects the company’s stable operational performance, healthy profitability, comfortable leverage profile, and expectations of improved capacity utilisation despite temporary geopolitical and operational headwinds.
PRICE-SENSITIVE TRIGGER
Event: CARE Ratings reaffirmed Bharat Wire Ropes Limited’s long-term and short-term bank facility ratings.
Type: Credit Rating Reaffirmation
Impact: Positive
Immediate Effect: The reaffirmed ratings indicate continued lender confidence in the company’s financial profile and borrowing quality. The Stable outlook suggests CARE Ratings expects operational and financial performance to remain resilient over the medium term.
Key Metrics:
- Long-Term Bank Facilities: ₹98 crore (reduced from ₹125.11 crore)
- Rating: CARE BBB+; Stable
- Action: Reaffirmed
- Short-Term Bank Facilities: ₹25 crore
- Rating: CARE A3+
- Action: Reaffirmed
- FY26 Revenue: ₹590.54 crore
- YoY: ▼ 4.6% (FY25: ₹619.32 crore)
- PBILDT: ₹130.75 crore
- YoY: ▼ 1.3% (FY25: ₹132.42 crore)
- PBILDT Margin (Adjusted): ~15.5%
- YoY: Largely Stable
- PAT: ₹72.46 crore
- YoY: Flat (FY25: ₹72.44 crore)
- Overall Gearing: 0.09x
- Improved from 0.18x
- Interest Coverage: 11.84x
- Improved from 9.93x
- Debt / Adjusted PBILDT: 0.89x
Highlight:
- Although FY26 revenue declined due to weak demand from West Asia, profitability remained stable, leverage improved materially, and debt coverage strengthened, supporting the reaffirmation of the company’s investment-grade credit ratings.
What Happened ?
Bharat Wire Ropes Limited informed the stock exchanges that CARE Ratings has reaffirmed its existing credit ratings for both long-term and short-term bank facilities.
According to the rating rationale, the reaffirmation reflects:
- Stable operating performance during FY26.
- Healthy profitability despite lower revenue.
- Comfortable capital structure and improving leverage.
- Strong debt servicing capability.
- Expectations of higher capacity utilisation supported by debottlenecking investments and an expanding distribution network.
CARE Ratings expects temporary pressure in Q1 FY27 from geopolitical disruptions in the Middle East and elevated LNG prices but believes these headwinds are likely to moderate over the coming quarters.
Key Details
CARE Ratings Assessment:
- Long-term facilities of ₹98 crore continue to carry a CARE BBB+; Stable rating.
- Short-term facilities of ₹25 crore continue to be rated CARE A3+.
- Revenue declined primarily due to lower exports to West Asia, which contributes around 10–15% of total revenue.
- Adjusted operating margins remained resilient because of:
- Better product mix.
- Debottlenecking capital expenditure.
- Higher contribution from value-added products.
- Capacity utilisation is expected to improve as recently installed balancing machinery becomes operational.
- Maharashtra PSI subsidy receivables continue to support liquidity and facilitate scheduled debt prepayments.
Operational Developments:
CARE Ratings also noted that:
- The Chalisgaon manufacturing facility received a temporary shutdown notice from the Maharashtra Pollution Control Board in June 2026.
- Operations resumed within approximately one week.
- The disruption had limited financial impact as inventory levels were sufficient to meet customer commitments.
- No financial penalties were imposed, although future regulatory developments remain under monitoring.
Note:
- CARE Ratings has maintained a Stable Outlook, indicating expectations that Bharat Wire Ropes will sustain its improving financial profile supported by its customer base, management experience, and ongoing capacity enhancements.
Risk Analysis
Summary:
- While the credit profile remains stable, several external and operational risks continue to warrant monitoring.
Key Risks:
- Weak demand from Middle East export markets due to geopolitical tensions.
- Exposure to steel price volatility affecting input costs.
- Foreign exchange fluctuations arising from export-oriented business.
- Working capital-intensive operations with an operating cycle of approximately 140 days.
- Potential regulatory risks following the environmental compliance notice.
- Rising LNG prices could temporarily pressure margins.
Worst Case:
- If export demand weakens further, raw material costs remain elevated, or debt-funded expansion increases leverage materially, credit metrics could weaken and place pressure on future ratings.
Risk Level: Moderate
Company Commentary
- CARE Ratings stated that the Stable outlook reflects expectations that Bharat Wire Ropes will continue improving its operational and financial performance, supported by its experienced management, established customer relationships, better capacity utilisation, and comfortable financial risk profile.
- The agency also expects revenue growth of approximately 15–20% annually over the next one to two years as external conditions normalise and distribution expands.
Official Exchange Filing: Bharat Wire Ropes Limited
