Gensol Engineering shares recover 15% from all-time low but still 32% down in 4 sessions

Gensol Engineering share price: After dropping 8.2% to hit an all-time low of ₹307 per share in today's early morning session, March 7, following the announcement of the CFO's resignation, Gensol Engineering shares quickly reversed their losses, spiking 15% from the day's low to reach ₹352.95 per share. As of 10:30 a.m., the stock is trading 3% lower at ₹324.75 per share.

On Thursday, the company announced that its Chief Financial Officer (CFO) and Key Managerial Personnel (KMP), Ankit Jain, had resigned with immediate effect. This resignation comes at a time when the company is facing ongoing delays in servicing its term loan obligations and allegations of falsifying debt servicing documents, which have led to credit rating downgrades from ICRA and CARE.

In a filing to the exchanges on Thursday, the company stated that it has appointed Jabirmahendi Mohammedraza Aga as the Chief Financial Officer (CFO) and Key Managerial Personnel (KMP), effective March 7, 2025.

Recent Developments

Addressing the downgrades, the company stated on Wednesday that proceeds from a series of asset divestments would be used to reduce debt. The company’s total current debt stands at ₹1,146 crore against reserves of ₹589 crore, resulting in a debt-equity ratio of 1.95.

Acknowledging the credit rating downgrades by CARE and ICRA, the company attributed them to a short-term liquidity mismatch, which it said was improving through customer payments.

“That said, we understand the concerns these downgrades have raised and are committed to addressing them responsibly for all our stakeholders,” the company said in a statement.

The firm also denied involvement in “falsification claims” and announced the formation of a committee to comprehensively review the matter, emphasizing its commitment to accountability, transparency, and sustainable business practices.

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

“In the current financial year, we have reduced our debt obligation by ₹230 crore,” the company stated, adding that it has initiated a series of asset divestments to significantly lower its debt.

The measures include the sale of 2,997 electric vehicles worth ₹315 crore and the divestment of a wholly owned Gensol subsidiary for ₹350 crore. As a result of these two transactions, the company expects its debt to be reduced by ₹665 crore, bringing the debt-equity ratio down to 0.8.

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