Press Release

Press Release

March 19, 2026

HARIYANA SHIP BREAKERS LIMITED
Rating Downgraded and Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	25.00	ACUITE BB \| Stable \| Downgraded	-
Bank Loan Ratings	200.00	-	ACUITE A4+ \| Reaffirmed
Total Outstanding	225.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has downgraded its long-term rating to ‘ACUITE BB’ (read as ACUITE double B) from ‘ACUITE BB+’ (read as ACUITE double B plus) on the Rs.25.00 Cr. bank facilities and reaffirmed its short term rating of 'ACUITE A4+' (read as ACUITE A four plus) on the Rs.200.00 Cr. bank facilities of Hariyana Ship Breakers Limited (HSBL). The Outlook is 'Stable'.

Rationale for rating downgrade
The rating factors in HSBL’s established presence in the ship-breaking industry; however, the downgrade reflects the significantly subdued operating performance in FY25 and FY26 on account of the absence of ships for dismantling, leading to negligible revenues and continued operating losses. While the financial risk profile remains moderate with low leverage and adequate coverage indicators, the company’s net worth remains heavily invested in associate/affiliate real-estate entities, limiting financial flexibility from core operations. Liquidity remains adequate, supported by modest repayment obligations and income from the investment portfolio. The rating remains sensitive to the timely availability of ships and the company’s ability to revive operating scale over the medium term.

About the Company

Incorporated in 1981, HSBL is a public limited company engaged in ship breaking at Alang-Sosiya, Bhavnagar, Gujarat, operating on a 4,185 sq. m plot leased from Gujarat Maritime Board. It also trades in ferrous and non-ferrous metals, coils, and holds real estate investments. The board includes Mr. Rakesh Shantisarup Reniwal, Mr. Shantisarup Ramkumar Reniwal, Mrs. Unnati Rakesh Reniwal, Mr. Yogesh Anantrai Thakkar, Mr. Divyush Goenka, and Mr. Viralkumar Shivlal Teli. The registered office is in Mumbai (MCA), with Bhavnagar listed under GSTIN.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered standalone business and financial risk profile of Hariyana Ship Breakers Limited (HSBL). The change in approach from earlier consolidation with Hariyana Ship Demolition Private Limited (HSDPL) & Inducto Steel Limited (ISL) is due to change in management of the company post-split between the promoter family.

Key Rating Drivers

Strengths

Established presence of promoters in ship recycling industry
The promoters have over three decades of experience in the ship-recycling business, providing the company with established industry relationships and an understanding of pricing and procurement dynamics. Their longstanding presence at Alang, a key ship-breaking hub, supports operational familiarity and market access.

Moderate financial risk profile
HSBL’s financial risk profile remains moderate, supported by a net worth of Rs.146.87 crore as on March 31, 2025, along with a conservative capital structure. The gearing stood low at 0.11 times in FY2025, reflecting limited dependence on external borrowings. Coverage indicators remain adequate, with interest coverage at 2.25 times and DSCR at 1.88 times in FY2025, indicating steady cash-flow support for repayment obligations. The TOL/TNW ratio at 0.13 times in FY2025 (against 0.12 times in FY2024) also reflects a comfortable liability position.

Overall, the moderation in leverage, balanced by stable debt protection metrics, underscores a financial profile that provides sufficient headroom for operational and funding needs.

Weaknesses

Subdued operations
HSBL’s operating performance remained significantly subdued in FY2025, with revenue declining sharply to Rs.0.22 Cr. from Rs.148.63 Cr. in FY2024 due to the non-availability of ships for breaking, which forms the company’s core business activity. The company reported a negative operating profit of Rs.(1.31) Cr. in FY2025 against Rs.(2.67) Cr. in FY2024, while PAT moderated to Rs.1.60 Cr. from Rs.3.23 Cr, supported largely by investment income in the absence of operational contribution. Going ahead, revenue is expected to remain very low in FY2026 given the continued lack of ship availability, with an improvement anticipated in FY2027 as the management expects one or two vessel buys to materialize over the next few months.

Significant investments in group companies
A significant portion of the net worth (~94% as on 31st March 2025) is invested primarily in associate/affiliate companies engaged in real estate, resulting in a heavily invested net worth profile. Timely recovery from these investments thereby providing liquidity boost shall remain a key monitorable.

Susceptibility of operations to ship availability and volatile steel prices
HSBL’s operations are exposed to risks from ship availability and volatile steel prices. Geopolitical factors often restrict vessel inflow, while competitive bidding and sharp price swings erode margins. Although the company is in discussions with brokers to purchase more ships, cash flows remain cyclical and uncertain.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Increase in operating income and margins with revival of operations
Generation of net cash accruals above Rs 5 Cr

Potential triggers (individual or collective) for a downward rating action:

Absence of revival of operations with net cash accruals falling below Rs 2 Cr
Any further significant investments in group companies

Liquidity Position

Adequate

HSBL’s liquidity position is adequate, marked by positive cash accruals of Rs.2.72 Cr. in FY2025 against modest debt obligation of Rs.0.14 Cr. during the same period. Going forward, the cash accruals are expected to be in the range of Rs.5.45-5.80 Cr. over the medium term. Further, liquidity is supported by a sizeable investment portfolio and low reliance on term debt. The current ratio stood at 0.19 times as on March 31, 2025, with unencumbered cash and bank balance of Rs.0.13 crore.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	0.22	148.63
PAT	Rs. Cr.	1.60	3.23
PAT Margin	(%)	714.88	2.17
Total Debt/Tangible Net Worth	Times	0.11	0.10
PBDIT/Interest	Times	2.25	3.06

Status of non-cooperation with previous CRA (if applicable)

Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm

Note on complexity levels of the rated instrument

In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
19 Dec 2024	Letter of Credit	Short Term	200.00	ACUITE A4+ (Downgraded from ACUITE A3)
19 Dec 2024	Cash Credit	Long Term	25.00	ACUITE BB+ \| Stable (Downgraded from ACUITE BBB- \| Negative)
21 Sep 2023	Letter of Credit	Short Term	200.00	ACUITE A3 (Reaffirmed)
21 Sep 2023	Cash Credit	Long Term	25.00	ACUITE BBB- \| Negative (Reaffirmed)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Punjab National Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	25.00	Simple	ACUITE BB \| Stable \| Downgraded ( from ACUITE BB+ )
Punjab National Bank	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	200.00	Simple	ACUITE A4+ \| Reaffirmed

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Sanidhya Jain
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai.

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Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.