Crisil Ratings Limited on September 16, 2025, reaffirmed the credit ratings of Allcargo Logistics Limited while revising specific instruments following the company's business restructuring and demerger plans. The overall rating continues on Watch Negative, reflecting the company’s moderate financial and business risk profile post demerger.

Allcargo Logistics Limited, headquartered in Mumbai, operates across international supply chain (ISC), express logistics, and contract logistics businesses. The company has recently implemented a composite scheme of arrangement approved on December 21, 2023. Under this scheme, the ISC business, including global and domestic supply chains, has been demerged into Allcargo Global Limited (AGL). The express and contract logistics businesses continue under the new Allcargo Logistics Limited (new ACL).

Crisil Ratings has maintained the long-term rating for Rs 875 crore bank facilities at Crisil AA-/Watch Negative with implications on the Rs 200 crore term loan revised to Crisil AA-/Watch Negative from previous Rating Watch with Developing Implications. The short-term rating for bank facilities of Crisil A1+ continues on Watch Negative. Additionally, the Rs 150 crore and Rs 50 crore Non Convertible Debentures (NCDs) have been withdrawn at the company’s request.

The ratings reflect continued muted performance of the ISC business, which accounted for 87 percent of group revenue in the first quarter of fiscal 2026. New ACL, operating express and contract logistics, reported revenue of Rs 492 crore in Q1 FY26 and a negative post Ind AS adjusted EBITDA of Rs 5 crore. Debt allocation post demerger indicates new ACL holds working capital debt for express and contract logistics, Gati KWE acquisition loans, and part of general corporate loans totaling approximately 12 percent of the group’s gross debt of Rs 1,060 crore as on June 30, 2025. Cash and equivalents stood at Rs 153 crore for new ACL, supporting liquidity.

The ISC business under AGL is facing global trade headwinds. Fiscal 2025 saw 25 percent revenue growth to Rs 14,077 crore, largely driven by higher freight rates. Pre-Ind AS adjusted EBITDA remained at Rs 217 crore in FY25, showing moderate profitability. In Q1 FY26, revenue from operations was Rs 3,330 crore with operating profitability of 1.6 percent. High Selling, General & Administrative expenses, one-time write-offs, and currency depreciation impacted EBITDA despite improvements in gross profits.

Allcargo maintains a strong integrated logistics presence. The ISC business is a global LCL consolidator with approximately 15 percent market share worldwide. Express logistics through Allcargo Gati covers 99 percent of districts in India offering surface, air, and supply chain management solutions. Contract logistics through Allcargo Supply Chain Pvt Ltd (ASCPL) adds operational diversification.

Financial risk profile is comfortable with net debt of Rs 467 crore and gross debt of Rs 1,059 crore as on June 30, 2025. Gearing stood at 0.44 times and adjusted interest cover at 3.3 times for FY25. Short-term debt utilization increased to Rs 853 crore from Rs 434 crore due to higher freight rates and strategic acquisitions. Term debt repayments of Rs 330 crore are scheduled for FY26.

Allcargo demonstrates strong ESG focus. The company has planted over 710,000 trees, maintains 50 percent women workforce in ECU Worldwide, and engages in corporate social responsibility through Avashya Foundation across health, education, environment, women empowerment, sports, and disaster relief. Governance structure includes 50 percent independent directors on the board with extensive disclosures.

Key rating sensitivities include sustained revenue growth with Pre-Ind AS lease adjusted EBITDA exceeding Rs 450 crore, improvement in debt metrics while maintaining liquidity, and any moderation in business risk due to slow global trade or debt-funded expansion could impact ratings downward.

Allcargo Logistics, promoted by Shashi Kiran Shetty, continues to be a leading integrated logistics provider offering NVOCC container consolidation, express logistics, contract logistics, CFS, ICD, and warehousing. Recent acquisitions, including stakes in Gati, Nordicon AB, and Fair Trade GmbH, along with demerger of ISC, strengthen its position in express and contract logistics. The group generated revenue of Rs 3,817 crore in Q1 FY26, 1.4 percent higher year-on-year with a pre-Ind AS adjusted EBITDA of Rs 19 crore. Net debt declined by 8 percent on-year to Rs 467 crore.

Allcargo’s diversified and asset-light operations, combined with healthy liquidity, integrated supply chain solutions, and ESG commitment, underpin the company's moderate but stable financial profile despite global trade challenges and intense competition in ISC and surface transport businesses.

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