Gensol's stock hits fresh one-year low; now down 83% year-to-date; is it still an avoid?

Shares of Gensol Engineering Ltd tumbled 5 per cent on Tuesday to hit a new 52-week low of Rs 130.15. The stock eventually settled 2.29 per cent lower at Rs 130.15. At this closing value, it has cracked 83.16 per cent in the calendar year 2025 so far.

Bourses BSE and NSE have put the securities of Gensol under the ESM (Enhanced Surveillance Measure) framework. Exchanges put mainboard companies with a market capitalisation (m-cap) less than Rs 1,000 crore under the ESM structure.

Market experts said investors should exit as the counter still looked weak. "Gensol is still looking weak on charts. My advice will be to clearly just get rid of the stock and exit," Gaurav Sharma of Globe Capital told Business Today.

Investors should avoid the counter over the medium- to short-term, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"Gensol has experienced a significant correction. It is recommended that investors remain cautious and on the sidelines until there is clear evidence of a decisive recovery in the stock's performance," said Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One.

The crisis-hit firm recently received a setback after it mutually decided not to proceed with the proposed asset takeover of 2,997 electric vehicles (EVs) by Refex Green Mobility Ltd (RGML). Gensol's EV assets operate on its parent's BluSmart platform.

Prior to this, the company faced multiple credit downgrades from rating agencies CARE and ICRA. ICRA downgraded Gensol's loan facilities totalling Rs 2,050 crore. The long-term fund-based term loan of Rs 925 crore and the fund-based cash credit of Rs 718.5 crore were downgraded from [ICRA]BBB- (Stable) to [ICRA]D. Additionally, long-term and short-term bank guarantee (BG) facilities totalling Rs 406.5 crore, along with a sub-limit BG of Rs 51.3 crore, saw a downgrade from [ICRA]BBB- (Stable)/[ICRA]A3 to [ICRA]D.

CARE Ratings followed suit, downgrading the firm's bank facilities worth Rs 716 crore to CARE D, indicating default or high credit risk. The long-term bank facilities of Rs 639.7 crore were downgraded from CARE BB+ (Stable) to CARE D, while the long-term/short-term bank facilities of Rs 76.3 crore were also slashed from CARE BB+ (Stable)/CARE A4+ to CARE D.

For the unversed, a 'D' grade stands for default status, which implies that the company may not fulfil its loan obligations.

ICRA also said it has now learnt that certain documents shared by Gensol, on its debt servicing track record, were apparently falsified, which raises concerns about its corporate governance practices, including its liquidity position. The agency mentioned that the company's unexecuted order book, which consists of 10-11 large projects, is at risk due to execution delays, regulatory approvals and potential cost overruns.