Coastal Corporation CARE BB Rating Reaffirmed in 2026

What CARE Ratings reviewed

CARE Ratings Limited has completed a credit review of Coastal Corporation Limited’s bank facilities totalling ₹341.78 crore. The agency assigned new ratings for part of the limits and reaffirmed ratings on the existing facilities, keeping the overall outlook at Stable.

For Coastal Corporation, a seafood processing and export company, the review matters because bank facility ratings influence borrowing costs, working-capital availability, and lender appetite. CARE’s reaffirmation indicates the credit profile remains in the same risk band, even as operating performance improved in FY25 and financial risk indicators weakened.

Ratings assigned and reaffirmed

CARE assigned a long-term rating of CARE BB; Stable on one set of facilities and affirmed CARE BB; Stable / CARE A4 on the mixed long-term/short-term lines. The agency’s notes also reference enhancement in the size of one facility, indicating higher sanctioned working-capital support.

Bank facilities and rating actions

The rating level indicates moderate risk in meeting financial obligations on time, as described in the available information.

FY25 revenue jump and the capacity driver

CARE’s rationale highlights improved revenue performance in FY25. Coastal Corporation reported revenue of ₹635.40 crore in FY25, a year-on-year increase of 44.50%.

The growth was attributed to higher production volumes following the commissioning and scaling up of the third processing unit. In a processing-led export business, higher throughput can lift top-line numbers quickly when raw material availability and export demand are supportive.

Profitability and leverage pressures remain visible

Despite the revenue rise, the material also points to pressure on profitability margins due to external factors. At the same time, the company’s balance-sheet indicators weakened in FY25.

CARE flagged a deterioration in capital structure, with overall gearing at 1.57x in FY25. The PBILDT interest coverage ratio declined to 1.74x. These metrics matter for a working-capital intensive exporter because funding costs and interest coverage can tighten sharply when inventory cycles elongate or realizations soften.

Liquidity: high working-capital utilisation

Liquidity was highlighted as a concern. Coastal Corporation’s fund-based working-capital limits were utilised at an average of around 85%, as cited in the provided details.

High utilisation typically reduces flexibility to absorb short-term shocks, including raw material price swings, freight movements, or collection delays. For seafood exporters, seasonality and shipment schedules can also create uneven cash flows, increasing reliance on bank limits.

Why the outlook is Stable

CARE maintained a Stable outlook and stated that the entity is expected to continue benefiting from the promoters’ extensive industry experience. The rationale also references government initiatives in the aquaculture sector as a supportive factor.

A Stable outlook, in this context, signals that CARE does not expect the credit profile to materially improve or deteriorate in the near term based on the information considered, even as it acknowledges both improved revenues and ongoing financial constraints.

Compliance update: SEBI certificate filing

Separately, Coastal Corporation submitted its mandatory SEBI compliance certificate for Q4 FY26 ended March 31, 2026. The certificate was issued by the registrar, Bigshare Services Private Limited.

While such filings are procedural, they are tracked by investors as part of routine governance and compliance monitoring.

A look back at earlier CARE rating actions

The text includes earlier CARE communications that help frame the latest reaffirmation.

In a November 22, 2024 update, CARE downgraded the rating on long-term/short-term bank facilities of ₹120.00 crore to CARE BB; Stable / CARE A4 from CARE BBB-; Stable / CARE A3, citing deterioration in FY24 and H1FY25 performance and higher working-capital borrowings. The same note also mentioned constraints such as geographical concentration risk, competitive intensity, dependence on climatic conditions, and the regulatory nature of the industry.

Earlier, in June 2023, CARE revised the bank facilities rating to CARE BBB-; Stable / CARE A3 from CARE BBB; Stable / CARE A3+, citing a slowdown in demand in the USA marine food market and delays in regulatory approvals.

Markets and third-party scorecards mentioned in the text

The provided material also cites a separate assessment from MarketsMoJO, which recorded a downgrade to a Sell rating with a Mojo Score of 48.0 and a Mojo Grade of Sell, down from Hold. That note attributes the quality downgrade to a negative five-year operating profit CAGR of -1.99% and an average ROE of 3.91%, while also referencing a high Debt to EBITDA ratio of 9.85x and relative underperformance of -8.46% versus BSE500’s +8.76%.

The text further lists market data points including a market cap of ₹224 crore and a current price of ₹33.4, along with other snapshot metrics (P/E 23.7, book value ₹43.4, dividend yield 0.72%, ROCE 5.81%, ROE 2.58%). These figures are not part of CARE’s rating note but provide context on how some market participants frame risk and valuation.

Key numbers at a glance

What investors and lenders may track next

For lenders, the reaffirmation at CARE BB; Stable / CARE A4 keeps the credit view unchanged while highlighting the need to watch leverage, interest coverage, and working-capital headroom. For equity investors, the divergence between strong FY25 revenue growth and weaker coverage and gearing metrics can be an area of focus.

On disclosures, the company’s routine SEBI compliance filings, and any subsequent updates on facility utilisation, profitability trends, and borrowing levels, are likely to remain key checkpoints.