CARE Downgrades HFCL’s Credit Ratings

CARE Ratings has downgraded HFCL Ltd.’s credit rating to ‘CARE A-; Stable’ from ‘CARE A; Stable’ for long-term bank facilities and to ‘CARE A2+’ from ‘CARE A1’ for short-term bank facilities. This information was shared by HFCL in its stock filing dated 29th August 2025.

This change in HFCL’s ratings has been made based on its performance during FY25 and Q1 FY26. The company’s topline during FY25 and Q1 FY26 was down by 9% and 24.80% YoY, respectively. Moreover, HFCL’s FY25 bottom line slumped by 49% YoY, whereas the company registered a loss of Rs. 29.30 crore during Q1 of FY26. In fact, Compounded Annual Growth Rate (CAGR) for the company’s profit and sales for the last 3 fiscals stood at -18% and -5% respectively. The company’s stock performance has also taken a massive hit, with stock price CAGR at -52% for the last one year.

As per CARE, HFCL’s new long-term rating indicates ‘adequate’ safety regarding completion of financial obligations with payment terms of over a year, and carries ‘low’ credit risk. The company’s new short-term credit rating represents a ‘strong’ degree of safety regarding timely fulfillment of short-term debts with ‘low’ credit risk.