According to reports from Business Standard, CARE Ratings has reaffirmed Everest Kanto Cylinder's (EKCL) long-term rating at 'CARE A-' with a 'stable' outlook. The agency has also affirmed the company's short-term rating at 'CARE A2+'. The reaffirmation factors in EKCL's stable performance in FY26, marked by stable total operating income (TOI) and improved profitability despite muted performance of its overseas operations. The ratings take note of the management's expectation that the sizeable GST-related contingent liabilities will be resolved in the near term, though the outcome of these matters remains a key rating monitorable.
As reported by Business Standard, the West Asia conflict adversely affected domestic and international operations owing to supply-chain disruptions, logistical challenges in overseas operations, and higher freight costs. This was reflected in moderation in performance in Q1FY27. The company's consolidated net profit had reported a 41.79% fall to ₹30.03 crore on a 10.49% increase in revenue to ₹346.31 crore in Q1 FY27 compared with Q1 FY26. The company's profit before interest, lease rentals, depreciation and taxation (PBILDT) stood at ₹47.38 crore in Q1FY27, while standalone PBILDT was ₹35.76 crore.
According to Business Standard, EKCL has undertaken strategic capacity expansion initiatives across India, Egypt and the United States (US). The company has set up its new cylinder manufacturing facility at Mundra (Gujarat), which was partly commissioned in FY26, with the total project cost revised to ₹225 crore against the earlier ₹150 crore estimate. As on March 31, 2026, the company had incurred ₹175 crore towards this project. The company is also setting up a manufacturing facility in Egypt, planned in two phases, with Phase I expected to commence commercial operations in H2FY27. The total estimated project cost is ₹190 crore, of which ₹115 crore has been incurred as on March 31, 2026. Additionally, EKCL plans a capacity expansion program at its US facility with an investment of ₹5.5 million.
As reported by Business Standard, EKCL is one of the leading players in the domestic market with a healthy market share and well-established relationships with reputed industry players. With over four decades of operations in the high-pressure seamless steel cylinder industry, EKCL has developed long-standing relationships with its customers and suppliers. The company serves a wide range of end-users, including automobile OEMs, CGD companies, and industries such as healthcare, aerospace, defence, semiconductors, and chemicals. Its reputed clientele includes leading automobile OEMs such as Tata Motors Limited, VE Commercial Vehicles Limited, and Bajaj Auto Limited, and CGD players such as Mahanagar Gas Limited, Hindustan Petroleum Corporation Limited, and Adani Total Gas Limited. While moderate customer concentration continues with top ten customers accounting for ~45% of TOI, EKCL benefits from a well-diversified and reputed customer base.
According to Business Standard, the ratings continue to derive strength from EKCL's long-standing position as one of the leading domestic manufacturers of high-pressure seamless steel gas cylinders. The ratings are further constrained by fluctuating profitability that is susceptible to raw material price and foreign-exchange volatility and working capital intensive operations. However, EKCL's liquidity position continues to remain adequate, characterised by sufficient cushion in accruals of ₹145-160 crore against annual repayment obligations of ₹15-60 crore over FY27-FY29. The company has free cash and bank balance of ₹71 crore and investments of ₹62 crore in mutual funds as on March 31, 2026, providing additional cushion. The average maximum utilisation of fund-based limits and non-fund-based limits stood at ~70% and ~81% respectively for 12 months ended May 31, 2026.
