Karamtara Engineering Credit Rating October 20, 2026: India Ratings Upgrades Bank Loans to IND AA-

The Karamtara Engineering credit rating has moved up a notch, weeks after the company’s September 2026 IPO. In a filing with the exchanges on October 20, 2026, the transmission tower and solar structure maker said India Ratings and Research had upgraded its long-term bank loan rating to IND AA- from IND A+, with a stable outlook. The short-term rating went to IND A1+ from IND A1. The upgrade covers bank loan facilities of ₹24,320 million, or ₹2,432 crore.

The rating letter itself is dated October 19. The company put it up on NSE at about 4:50 PM the next day, along with the full rationale from the agency.

Why India Ratings upgraded the Karamtara Engineering credit rating

The short answer is scale. Consolidated revenue rose to ₹43,120 million (₹4,312 crore) in FY26 from ₹31,584 million in FY25, which works out to growth of roughly 37%. The agency credits higher volumes of solar structures and transmission line towers for that jump.

Margins held up too, which matters for a business where steel and zinc are the big inputs. Per the rationale:

• Consolidated EBITDA margin improved to 11.6% in FY26, from 11.0% in FY25.
• EBITDA per tonne rose to ₹12,844 from ₹11,890.
• Interest coverage (operating EBITDA divided by gross interest expense) improved to 3.53x from 2.69x.
• The order book stood at ₹60,000 million (₹6,000 crore), to be executed over the next 12 to 18 months.

There’s also a mix story. Solar structures made up 79% of revenue in FY26, down from 81% in FY25, as wind towers started contributing and transmission tower sales grew. The agency says nearly 25% of outstanding orders are now for transmission line towers. Domestic sales were 43.3% of the total in FY26.

The IPO money did a lot of the work

We’d say this is the part that explains the timing. Karamtara raised ₹6,750 million through its IPO in September 2026, and ₹6,000 million of that is meant for repaying working capital debt. India Ratings says around ₹4,000 million had been used for this so far, with about ₹2,000 million more likely to go towards it over the next one to two months.

That matters because net leverage (net adjusted debt to operating EBITDA) actually went up in FY26, to 3.50x from 3.02x, thanks to term debt taken for capex. The agency expects it to stay below 3.5x over FY27-FY28 as the debt gets paid down and earnings grow. Free cash flow was negative at ₹4,379 million in FY26, and is expected to stay negative in FY27 before turning positive in FY28.

The upgrade rests as much on how the IPO money is being used as on last year’s growth.

What could go wrong

The rationale is fairly direct about the risks. The biggest one is a capacity project in Saudi Arabia, with an estimated cost of ₹4,050 million, meant to add 0.22 million tonnes a year and start generating revenue from FY28. India Ratings flags time and cost overrun risk there, linked to the US-Iran conflict. It also points to raw material and currency swings, and to working-capital-heavy operations.

The agency spells out its downgrade trigger. A delay in capex, weaker profitability, or a longer working capital cycle that pushes net leverage above 3.5x on a sustained basis could lead to negative action. Since FY26 leverage was already at 3.50x, there isn’t much room. That’s the number we’ll be watching when the company reports results.

For a quick read on what a rating change does and doesn’t tell you, see our note on the recent TVS Motor credit rating reaffirmation. Our guides on how to analyse quarterly results and trade receivables days are useful for tracking the working capital side.

Source: the Karamtara Engineering filing on NSE with the India Ratings rationale. Rating scales are explained on the India Ratings definitions page, and live prices are on the NSE quote page.

Disclaimer: This article is for information and education only and is not investment advice. Please consult a SEBI-registered adviser before making investment decisions.