RACL Geartech's debt reduction leads to positive credit rating outlook

RACL Geartech Limited has seen its credit rating outlook revised to 'Positive' by CARE Ratings Limited, reflecting a substantial improvement in its financial health. The company's total outstanding debt has decreased significantly from ₹336.93 crore to ₹273.38 crore, a reduction of ₹63.55 crore. This positive change is attributed to an equity infusion of approximately ₹80 crore in Q1FY26, primarily used for prepaying long-term debt and improving overall gearing.

The Long Term Bank Facilities are now rated CARE A-; Positive, a revision from the previous CARE A-; Stable. Similarly, the Long Term/Short Term Bank Facilities also saw their outlook revised to CARE A-; Positive / CARE A2+ from CARE A-; Stable / CARE A2+. Short Term Bank Facilities maintained their rating at CARE A2+.

The company's overall gearing ratio improved to 0.66x as of June 30, 2025, from 1.34x on March 31, 2025. This was driven by an increase in net worth and the reduction in total debt. RACL Geartech anticipates its overall gearing ratio to remain in the range of 0.56x – 0.75x, supported by planned capital expenditure and strategic projects with a combined revenue potential of approximately ₹350 crore over the next four years.