Gensol Engineering Share Price Declines 30% In Two Days After Rating Downgrade

Gensol Engineering Ltd.'s share price continued its downward trajectory, falling another 10% on Wednesday after a 20% decline on Tuesday. The stock hit the lower circuit limit following a rating downgrade from CARE Ratings, which cited delays in servicing term loan obligations as the primary reason for the downgrade.

CARE Ratings revised the ratings for Gensol Engineering Limited’s (GEL) bank facilities, downgrading the long-term bank facilities to CARE D from CARE BB+; Stable, and the long-term/short-term bank facilities to CARE D from CARE BB+; Stable/CARE A4+. This rating action aligns with CARE’s policy on default recognition, following feedback from GEL’s lenders regarding delays in debt servicing.

GEL, the flagship company of the Gensol Group, has a decade-long track record in the renewable power segment. The company provides engineering, procurement, and construction (EPC) and operations and maintenance (O&M) services for solar power projects. Additionally, GEL generates revenue from its electric vehicle (EV) leasing business.

The company’s quarterly earnings report revealed a decline in both its bottom line and operational performance. Gensol Engineering reported a 6.1% drop in net profit for Q3, with earnings of Rs 16.9 crore, down from Rs 18 crore in the same period last year.

The scrip fell as much as 9.99% to Rs 372 apiece. This compares to a 0.83% advance in the NSE Nifty 50 Index.

It has fallen 63.89% in the last 12 months. Total traded volume so far in the day stood at 0.9 times its 30-day average. The relative strength index was at 17.