The agency has also affirmed the company’s short-term rating at 'IND A1+’.
India Ratings and Research stated that the ‘positive’ outlook reflects the likelihood of an improvement in PJL’s operating profitability in FY26, after a subdued FY25, leading to an improvement in its credit profile.
The fall in realisations amid a tepid demand and an increasing competitive intensity, led to a fall in EBITDA in FY25, as against the agency’s expectation of an improvement. However, the agency expects an improvement in cement demand and increased realisations, coupled with cost optimisation measures, across segments to result in an improvement in the EBITDA in FY26.
Furthermore, despite the fall in the EBITDA, the company reduced its net debt by monetising non-core assets in 4QFY25, resulting in a flattish net leverage. The interest coverage, which fell in FY25 due to a lower EBITDA, is likely to improve in FY26 with the recovery in EBITDA and debt reduction.
The liquidity remains adequate with sizeable, unencumbered cash and equivalents and unutilised bank lines.
The agency further said that a substantial improvement in the operating performance and profitability, along with the adjusted net leverage reducing below 2.0x, on a sustained and consolidated basis, could be positive for the ratings.
However, a weaker-than-expected operating performance and/or higher-than-expected capex, leading to the adjusted net leverage remaining above 2.0x, on a sustained and consolidated basis, could be negative for the ratings.
Prism Johnson (PJL) is a leading manufacturer of building material such as cement, RMC, and ceramic tiles in India. It also has interests in building materials, sanitary-ware and insurance through subsidiaries and joint ventures.
The scrip rose 0.63% to currently trade at Rs 142.65 on the BSE.