Crisil revises Bombay Dyeing rating outlook to stable, reaffirms BBB+ rating

Crisil Ratings Ltd on Friday (January 2) has revised its outlook on the long-term bank facilities and fixed deposits of The Bombay Dyeing and Manufacturing Company Ltd to 'Stable' from 'Positive', while reaffirming the long-term rating at ‘Crisil BBB+’.

The rating on the company’s short-term bank loan facilities has been reaffirmed at ‘Crisil A2+’, the company said. The total bank loan facilities stand at ₹501 crore. The rating on fixed deposits of ₹0.3 crore has also been reaffirmed at ‘Crisil BBB+’ with the outlook revised to ‘Stable’ from ‘Positive’.

According to the rating rationale issued by Crisil, the revision in outlook reflects moderation in operating profitability of the polyester staple fibre (PSF) segment in the first half of fiscal 2026. This was due to lower sales from the higher-margin export market, largely to the US.

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Crisil noted that while the company is undertaking cost efficiency measures to save power costs and improve realisations through value addition, an increase in export business will be critical for improvement in profitability. Sustenance of scale and margin improvement in the PSF segment will remain key monitorables.

Crisil also said the company is expected to launch a fresh real estate project in the fourth quarter of fiscal 2026, and customer bookings, response, and resulting cash flows will be monitored.

The rating agency said the company’s financial profile and liquidity remain strong, supported by nil debt and surplus cash and cash equivalents, including liquid investments of about ₹1,300 crore as of September 30, 2025. Crisil expects the company to maintain significant liquidity even with the launch of real estate projects in fiscal 2026.

The ratings continue to reflect the company’s diversified revenue profile, experienced management, strong market position in the PSF segment, established track record in executing real estate projects, and strong financial risk profile.

Also Read: Bombay Dyeing Q3 Results: Revenue grows 12.6% to ₹414.8 crore, EBITDA turns positive

These factors are partly offset by low operating margins in the PSF segment, exposure to volatility in raw material prices and foreign exchange fluctuations, and the cyclicality inherent in the Indian real estate industry. For the purpose of the ratings, Crisil has combined the business and financial risk profiles of Bombay Dyeing with its 97.36%-owned subsidiary, P.T Five Star Textiles, Indonesia.

Crisil said the outlook is stable, reflecting expectations that the company will continue to benefit from its established presence and client relationships. Key sensitivities include improvement in PSF operating profitability above 2%, timely launch of new projects with adequate customer bookings, and sustenance of liquidity surplus.

On Friday (January 2), shares of Bombay Dyeing & Manufacturing Company Ltd ended at ₹129.50, down by ₹2.76, or 2.09%, on the BSE.