Thirumalai Chem. sees a credit rating action

The specific US-project cost overrun cannot be quantified from the cited quarterly disclosures. The initial capital-expenditure budget and the latest revised project cost are not reported, so no defensible Rs crore overrun or percentage variance can be calculated. Capital work-in-progress reached Rs 2,518.4 Crores in Q4 FY26 versus Rs 1,739.8 Crores in Q2 FY26, but this is cumulative CWIP, not evidence of a cost overrun against budget. ^[1]

Consolidated leverage and coverage

The latest filing-supported quarterly metrics are Q4 FY26:

On a trailing-twelve-month basis, the position remained weak: consolidated net debt/EBITDA was -123.34x and interest coverage was -1.27x in Q4 FY26. ^{[7] [8]} The negative TTM ratios reflect negative TTM EBITDA of Rs 16.45 Crores and negative TTM EBIT of Rs 112.79 Crores. ^{[9] [10]}

Analytical implication: the project’s funding burden appears to have coincided with higher net debt, lower cash and rising finance costs, but the filings do not isolate how much of that movement was caused by the US project versus other financing or operating requirements. Therefore, the ratios demonstrate materially elevated balance-sheet and debt-servicing pressure, but they do not provide a quantified causal bridge from the project’s alleged cost overrun to leverage or coverage. A third-party Q1 FY27 article cites a 0.63x interest-coverage ratio, but the excerpt does not establish the consolidation basis or metric definition, so it is not directly substituted for the Q4 FY26 consolidated filing metric. ^[11]

The US project’s full commissioning/commencement of operations has been pushed to December 2026, from the earlier June/July 2026 target. ^[12]

The revised project cost is approximately USD 340 million, including working capital and ramp-up costs. ^[13] The latest financing disclosure indicates a planned USD 130–180 million of external funding for the US subsidiary. ^[14] On a mechanical residual basis, this implies approximately USD 160–210 million would need to be funded through internal accruals or other non-debt sources:

• Total project cost: USD 340 million ^[13]
• External debt planned: USD 130–180 million ^[14]
• Implied internal-accrual/non-debt portion: USD 160–210 million, derived from the above figures

However, the cited ICRA extract does not provide a definitive as-of-31 March 2026 split between debt already raised, debt still to be raised, and internal accruals. A separate shareholder-approved financing plan refers to USD 140 million, which falls within the broader USD 130–180 million range but should not be treated as proof of the final funding mix. ^[15]

Thirumalai Chemicals is substantially more leveraged than the observable named-peer set. Its latest reported consolidated debt-to-equity ratio was 1.34x in Q4 FY26, versus a simple average of approximately 0.07x for J.G. Chemicals, I G Petrochemicals, Indo Borax and Andhra Sugars. The gap is approximately 1.27x, or nearly 19 times the peer average. However, 0.07x is not a clean average of “similar greenfield expansion” peers, because the cited material does not establish that all four companies recently undertook comparable greenfield projects.

Leverage comparison — Q4 FY26, consolidated

The broad named-peer average is derived from 0.01x ^[19], 0.27x ^[21], 0.00x ^[24] and 0.00x ^[26], producing 0.07x. On a net basis, the corresponding average is approximately 0.04x, derived from -0.02x ^[20], 0.25x ^[22], -0.04x ^[25] and -0.02x ^[27]. Thirumalai’s 1.30x net debt-to-equity is therefore also materially above that broad peer average.

Why the downgrade matters

The latest leverage snapshot is Q4 FY26, while ICRA’s downgrade was reported on 13 August 2026; therefore, the Q4 balance sheet is the latest reported financial base being assessed, not a post-downgrade quarter. ICRA cited large debt-funded capex, cost revisions, completion and ramp-up risk, and a breach of certain FY2026 lender covenants for which waivers were obtained ^[18].

The risk is therefore not simply that Thirumalai has a higher debt-to-equity ratio than peers. Its Q4 FY26 consolidated interest coverage was only 0.61x ^[5], while TTM consolidated interest coverage was -1.27x ^[8]. This points to a weaker current debt-servicing position than the leverage ratio alone implies. By contrast, the named peers with available data had very low gross leverage, although their expansion comparability is not demonstrated.

Conclusion: Thirumalai’s leverage is an outlier versus the named peer set, but a defensible average specifically for domestic specialty-chemical companies that recently completed similar greenfield expansions cannot be calculated from the cited disclosures. The 0.07x figure should be treated as a broad peer reference, not as a like-for-like expansion-cohort benchmark.

_Scope note: this comparison also included I G Petrochems (IGPL), which the answer above does not cover. Ask about any of them for a full side-by-side._