Gensol Engineering Plans Major Debt Reduction Through Asset Sales

Gensol Engineering announced on Wednesday that proceeds from a series of asset divestments will be used to reduce debt, as the company seeks to address concerns raised by recent credit rating downgrades.

The firm acknowledged the rating downgrades by CARE and ICRA, attributing them to a short-term liquidity mismatch, which it assured is improving through customer payments.

“We understand the concerns these downgrades have raised and are committed to addressing them responsibly for all our stakeholders,” the company stated.

Denial of Falsification Claims and Formation of Review Committee

Gensol Engineering denied any involvement in “falsification claims” and announced the formation of a committee to comprehensively review the matter. “This underscores the company’s commitment to accountability, transparency, and sustainable business practices,” the firm said.

Financial Performance 

The company highlighted its robust financial performance, with an order book exceeding ₹7,000 crore. In the first nine months of the current fiscal year, Gensol Engineering reported a 42% growth in revenue to ₹1,056 crore, an 89% increase in EBITDA to ₹246 crore, and a 34% rise in profit to ₹67 crore.

“These are challenging times, and we are taking decisive steps toward strengthening our financial position and ensuring long-term financial stability,” it added.

Debt Reduction Measures and Asset Divestments

Gensol’s total current debt stands at ₹1,146 crore, against reserves of ₹589 crore, resulting in a debt-equity ratio of 1.95. However, the company stated that it has already reduced its debt obligation by ₹230 crore in the current financial year and has initiated asset divestments to further decrease its debt burden.

Among the planned divestments, the company will sell 2,997 electric vehicles worth ₹315 crore and a wholly-owned Gensol subsidiary for ₹350 crore. These transactions are expected to reduce its debt by ₹665 crore, bringing the debt-equity ratio down to 0.8.

Commitment to Achieving Zero Net Debt

Gensol reaffirmed its commitment to repaying existing debt and meeting working capital obligations using the proceeds from asset sales. “While the company continues to pay its debt obligations, all proceeds from the above initiatives will be directly utilised toward repaying our existing debt and working capital obligations,” the company stated.

Through these initiatives and future planned interventions, Gensol Engineering is resolute in its goal of achieving a zero net debt status.

“We are confident in our ability to navigate this period and emerge stronger. We value the trust of our stakeholders and will provide regular updates as we progress toward our financial goals,” the company concluded.

Stock Performance

On March 05, 2025, Gensol Engineering share price ended 9.99% lower at ₹372.60. Gensol Engineering’s share price reached a 52-week high of ₹1,125.75 on June 24, 2024, and a 52-week low of ₹372.60.00 on March 05, 2025. As per BSE, the total traded volume for the stock stood at 0.20 lakh shares with a turnover of ₹75.54 lakhs.

At the current price, Gensol Engineering shares are trading at a price-to-earnings (P/E) ratio of 11.01x, based on its trailing 12-month earnings per share (EPS) of ₹33.85, and a price-to-book (P/B) ratio of 2.20, according to exchange data.

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