The rating agency has downgraded Gensol's long-term bank facilities of Rs 639.70 crore from CARE BB+ (Stable) to CARE D, and its long-term/short-term bank facilities of Rs 76.30 crore from CARE BB+ (Stable) / CARE A4+ to CARE D / CARE D. This downgrade indicates a substantial increase in the perceived risk of default on the company's debt obligations.
CARE Ratings cited ongoing delays in the servicing of Gensol's term loan obligations as the primary reason for the downgrade. Reports from lenders indicate overdue payments and SMA classification of the company's accounts. The rating agency assessed Gensol's liquidity as "poor," further contributing to investor apprehension.
Despite the severe downgrade, Gensol Engineering's management has expressed confidence in the company's long-term prospects. In a statement released alongside the credit rating announcement, chairman and managing director Anmol Singh Jaggi emphasized the company's strong revenue visibility and healthy order book. He also highlighted ongoing initiatives aimed at strengthening the company's balance sheet, including debt reduction and working capital optimization.
Founded in 2012, Gensol Engineering has over a decade of experience in the renewable energy sector. Its diverse business interests include EPC and O&M services for solar power projects, EV leasing through its partnership with Blu-Smart, and the upcoming EV manufacturing division, with a plant currently under construction in Pune.
The company's consolidated net profit rose 32.52% to Rs 16.91 crore on a 56.42% increase in revenue to Rs 344.51 crore in Q3 FY25 over Q3 FY24.