Harrisons Malayalam's Long-Term Debt Rated CARE BBB; Outlook Revised to Stable
Harrisons Malayalam Limited's long-term bank facilities rated CARE BBB; Stable, outlook revised from Negative. Short-term facilities rated CARE A3+. Long-term facility amount enhanced to ₹107.22 crore. Rating driven by RP-Sanjiv Goenka Group affiliation, strong market position, and improved operational performance in FY25 and H1FY26.
A revised credit rating and outlook can influence borrowing costs and investor perception, impacting the company's financial flexibility and access to capital.
The credit rating has been reaffirmed with a stable outlook, and the amount for long-term facilities has been enhanced. The outlook was revised from negative to stable, indicating a positive improvement in the company's creditworthiness.
Harrisons Malayalam Limited (HML) has had its credit rating for banking facilities reaffirmed by CARE Ratings Limited (CARE). The long-term bank facilities have been rated CARE BBB with a Stable outlook, an enhancement from the previous rating of CARE BBB; Negative. The amount for long-term facilities has been enhanced to ₹107.22 crore from ₹93.14 crore. Short-term bank facilities are rated CARE A3+.
The rating reaffirmation is supported by HML's position within the RP-Sanjiv Goenka Group, the promoters' experience in the plantation business, and the company's standing as the largest rubber producer and second-largest tea producer in South India. The company benefits from a secure market for its centrifuged latex and established corporate relationships in the tea business.
CARE Ratings positively noted the improvement in HML's operational performance in FY25 and H1FY26, attributed to sustained rubber and tea prices, improved tea yields, and a comfortable capital structure. The outlook was revised from Negative to Stable due to the recovery in the tea segment's performance, supported by better realisations and yields. The company is also expanding its tourism segment, with plans to develop more bungalows.
Key strengths include improved operational performance in FY25 and H1FY26, with tea contributing 43% and rubber 57% of the total operating income. Despite a decline in tea sales volume, improved realisations and favourable weather conditions boosted yields. Rubber sales also saw growth in operating income due to increased realisations. The company's financial risk profile remains comfortable with overall gearing at 0.67x as of March 31, 2025. Planned debt availments are expected to fund replantation activities and tourism development, with the capital structure anticipated to remain stable.
However, the ratings are constrained by the inherent risks in agriculture, including exposure to vagaries of nature, volatile commodity prices, and increasing labour costs. Other weaknesses include a declining mature area in rubber plantations due to past replantation challenges and the labour-intensive nature of operations. The company's liquidity is considered adequate, with expected accruals covering term debt obligations and improved liquidity in H1FY26 due to profit on sale of property.
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Harrisons Malayalam Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Harrisons Malayalam Limited. Read the original for the full detail.