Posted on March 6, 2025, by Niftynews
The gensol share price has suffered a significant decline, hitting a new all-time low on March 6, 2025, following recent credit downgrades. The gensol engineering share price was locked at a 10% lower circuit limit, reaching ₹334.80, marking a 35% drop in just three days. These declines came after rating agencies CARE and ICRA downgraded the company’s credit ratings due to concerns about its liquidity and debt obligations.
Debt Issues and Market Sentiment Affecting Gensol Share Price
The drastic drop in gensol share price is primarily linked to the downgrades by CARE and ICRA. Both agencies lowered their ratings for Gensol Engineering, citing concerns over the company’s ability to meet its debt servicing obligations. These ratings downgrades have created negative sentiment around the gensol engineering share price, causing intense selling pressure in the market.
Despite these setbacks, Gensol Engineering, which specializes in solar power engineering, procurement, and construction (EPC) services, has outlined a plan to reduce its debt and stabilize its financial position.
Gensol Engineering’s Debt Reduction Plan and Asset Divestment Strategy
In response to the downgrades, Gensol Engineering has proposed an aggressive debt reduction plan to restore its financial health and reduce the gensol share price pressure. The company is aiming to lower its debt through asset sales, including the sale of 2,997 electric vehicles worth ₹315 crore and divesting a wholly owned subsidiary for ₹350 crore. These efforts are expected to reduce the company’s debt by ₹665 crore and improve the gensol engineering share price by lowering its debt-equity ratio from 1.95 to 0.8.
Gensol’s management remains committed to addressing the liquidity issues that led to the downgrades, and they are working diligently to enhance cash flow through customer payments.
Financial Strength Despite Challenges
Despite the current difficulties and the negative impact on the gensol engineering share price, Gensol Engineering continues to show strong financial fundamentals. The company reported a 42% increase in revenue to ₹1,056 crore for the first nine months of the fiscal year. EBITDA has risen by 89% to ₹246 crore, and profit increased by 34% to ₹67 crore.
The company has also managed to reduce its debt obligations by ₹230 crore in the current financial year, demonstrating progress in its efforts to reduce leverage.
Impact of Credit Rating Downgrades on Gensol Share Price
The downgrade by ICRA and CARE was a significant factor in the steep decline of the gensol share price. ICRA lowered the company’s bank facilities rating to [ICRA]D, while CARE revised its long-term rating to “CARE D.” These downgrades were triggered by delays in debt servicing, and the market responded by pulling back significantly, resulting in the fall of the gensol engineering share price.
What’s Next for Gensol Engineering and Its Share Price?
Looking ahead, Gensol Engineering remains focused on reducing its debt and improving its liquidity position. The company’s debt reduction plan, including the asset sales and restructuring efforts, should eventually bring some stability to the gensol share price in the long term. However, it will take time for investor sentiment to recover and for the gensol engineering share price to stabilize.
Conclusion
The gensol engineering share price has faced a tough period with a sharp decline following credit downgrades. While the company is taking steps to address its debt and liquidity issues through asset divestments, the market remains cautious. The gensol share price will likely remain volatile until these measures show tangible results, but Gensol’s strong financials and commitment to resolving its debt issues offer hope for the future.
Stay tuned for further updates on the gensol share price and the company’s efforts to recover from the recent downturn.
