India Ratings Upgrades ABDL's Bank Facilities to 'IND AA-' with Stable Outlook
India Ratings upgraded ABDL's long-term bank facilities to ‘IND AA-’ and short-term facilities to ‘IND A1+’. The upgrade reflects sustained growth, improved profitability through premiumization, and progress in backward integration. Net leverage is expected to remain comfortable despite capex. The company's consolidated revenue grew to ₹39,228 crore in FY26.
A credit rating upgrade to 'AA-' is a significant positive development that can improve the company's borrowing costs, enhance its financial flexibility, and boost investor confidence, thereby having a high impact on its operations and market standing.
The credit rating upgrade by India Ratings from 'IND A' to 'IND AA-' for long-term facilities and 'IND A1' to 'IND A1+' for short-term facilities signifies a positive assessment of the company's financial health and future prospects.
India Ratings and Research (Ind-Ra) has upgraded Allied Blenders and Distillers Limited’s (ABDL) long-term bank facilities to ‘IND AA-’ from ‘IND A’ with a Stable Outlook. The agency also upgraded the short-term bank facilities to ‘IND A1+’ from ‘IND A1’. New facilities have been rated as follows: Bank Facilities (RBI) of ₹12,750 crore (INR 12,750 million) are now ‘IND AA-/Stable/IND A1+’, an upgrade from previous ratings. Additionally, new Bank Facilities of ₹3,250 crore (INR 3,250 million) have been assigned the rating ‘IND AA-/Stable/IND A1+’.
The upgrade reflects ABDL's sustained growth in consolidated operations in FY26, driven by strong sales momentum in key brands and markets. Improved profitability is expected to be sustained through a better sales mix and premiumization, leading to enhanced gross margins. Progress in backward integration projects is set to support EBITDA margins and mitigate risks from Extra Neutral Alcohol (ENA) price volatility.
Ind-Ra expects ABDL's consolidated net leverage to remain comfortable over the medium term, despite significant ongoing capex. The company's strong market position in the Indian made foreign liquor (IMFL) industry, pan-India diversification, and the industry’s growing market size also provide comfort.
However, the ratings are constrained by ABDL's elongated net working capital cycle, particularly due to higher concentration and lagging receivables in the Telangana market. The luxury segment, launched in FY25, is also expected to dilute consolidated profitability in the medium term. Heightened near-term risk from inflation in packaging costs due to geopolitical concerns might pressure margins in FY27.
The company's consolidated revenue grew at a CAGR of 10.81% over FY21-FY26, reaching ₹39,228 crore (INR 39,228 million) in FY26. Consolidated EBITDA improved significantly to ₹5,418 crore (INR 5,418 million) in FY26. The management expects the Prestige and Above (P&A) segment’s revenue contribution to continue growing. ABDL also plans to achieve 100% ENA integration by FY29-FY30.
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Allied Blenders and Distillers 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 high impact, which is the band that most often changes something.
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