Electrotherm (India) Ltd

Key board approvals and disclosures

• Approved unaudited standalone and consolidated financial results for quarter ended 30 June 2026.
• Allotted 109.50 lakh, 6% NCRPS to five existing holders; Ahmedabad Aviation and Aeronautics Ltd non-consenting.
• Redeemed 10,50,000 NCRPS to Ahmedabad Aviation and Aeronautics Ltd; per NCLT order.
• Shares will be unlisted and not increase share capital under Section 55(3).
• NCLT order dated 21 July 2026 permitted NCRPS issuance and redemption.
• 40th AGM date to be intimated separately.
• Auditors' review noted non-provision of interest on NPAs.
• Standalone net profit overstated by Rs 40.46 crore due to non-provision.
• Consolidated non-provision of interest Rs 50.90 crore; total unprovided Rs 1,446.87 crore.
• Going concern uncertainties highlighted for Bhaskarpara Coal, Shree Ram Electro Cast, Hans Ispat.
• Regulatory and litigation disclosures include ED PMLA case, bank account seizures, and DRT actions.
• Existing unredeemed preference shares deemed redeemed upon NCRPS allotment.

Default details

• Nature of defaulted obligation: Term loan and working capital loan.
• Lenders: Invent Assets Securitisation & Reconstruction Private Limited, assignee of Allahabad/Indian Bank and Punjab National Bank.
• Date of default: 30-06-2026.
• Current default: Principal Rs 40.00 crore; Interest Rs 6.46 crore.
• Total principal: Rs 180.00 crore; Tenure: 11 years; Interest: 11% p.a.; Secured.
• Total outstanding borrowings from banks/financial institutions: Rs 986.20 crore (as of 30 June 2026).
• Total financial indebtedness: Rs 1,000.69 crore (as of 30 June 2026).
• Notes: Settlement with ARC; provisional figures; excludes uncharged interest; Rare ARC not included.

Appointments

• Appointed Raj Kumar Bansal as Non-Executive Independent Director for 5-year term (20 Jul 2026–19 Jul 2031).
• Harish Mukati appointed Additional Director and WTD/CEO for Steel; tenure until next AGM; WTD for 3 years.
• WTD/CEO appointment is subject to members' approval.

Dematerialisation processing and listing

• Securities received for dematerialisation during quarter ended 30 June 2026 were confirmed to the depositories.
• The securities in these certificates have been listed on the exchanges where the existing securities are listed.
• Physical certificates received for dematerialisation were mutilated, cancelled after verification, and depositories named as registered owner within timelines.

Internal Auditor Changes

• M/s. N R P S & Associates LLP ceased as Internal Auditor on 31-Mar-2026 after term completion.
• M/s. G. K. Choksi & Co., Chartered Accountants, appointed Internal Auditor from 01-Apr-2026 to 31-Mar-2027.
• M/s. G. K. Choksi & Co. is a partnership firm established in 1972 with expertise in audit, tax, litigation, and internal controls.

Financial Results and Auditor Review

• Board approved unaudited standalone and consolidated results for quarter and nine months ended 31-Dec-2025 on 11-Feb-2026.
• Statutory auditor Hitesh Prakash Shah & Co. issued limited review with qualification on non-provision of interest on NPA loans.
• Non-provision understated net loss by Rs 37.98 crore (quarter) and Rs 110.41 crore (nine months).
• Total unprovided interest on loans amounts to Rs 1026.92 crore (standalone) and Rs 1356.71 crore (consolidated).
• Several loans defaulted or in settlement with Asset Reconstruction Companies; impact recognized upon compliance.
• Pending litigations, recovery proceedings, and regulatory notices noted, some affecting going concern assumptions.

Impact on Subsidiaries and Joint Ventures ️

• Material uncertainty on going concern for Bhaskarpara Coal Company Limited, Shree Ram Electro Cast Limited, and Hans Ispat Limited due to asset de-allocation and auctions.
• Group monitors regulatory and legal developments affecting financial position.

Compliance and Other Disclosures

• Company filed appeal against Rs 0.52 crore GST demand related to input tax credit; adjudication pending.
• New Labour Codes caused Rs 9.35 crore incremental impact in gratuity and compensated absences.
• Some trade receivables, payables, and advances are subject to confirmation and reconciliation.

Financial Performance 📊

• Standalone Q3 FY26 revenue was Rs 903.79 crore, down 16.4% YoY from Rs 1,081.23 crore.
• Standalone Q3 FY26 net loss after tax was Rs 35.50 crore versus Rs 88.05 crore profit YoY.
• Nine-month standalone revenue declined 13.6% YoY to Rs 2,552.10 crore; net loss was Rs 29.54 crore versus Rs 243.15 crore profit YoY.
• Consolidated Q3 FY26 revenue was Rs 903.79 crore, down 16.4% YoY; net loss was Rs 35.42 crore versus Rs 88.34 crore profit YoY.
• Nine-month consolidated revenue declined 13.6% YoY to Rs 2,552.10 crore; net loss was Rs 29.29 crore versus Rs 256.65 crore profit YoY.
• No exceptional items in Q3 FY26; prior periods had Rs 106.78 crore standalone and Rs 119.87 crore consolidated.

Segment Performance 🏭

• Nine-month consolidated revenue: Special Steel Rs 1,737.40 crore, Engineering & Technologies Rs 798.07 crore, Electric Vehicle Rs 28.57 crore.
• Nine-month consolidated results: Special Steel loss Rs 29.02 crore, Engineering & Technologies profit Rs 16.20 crore, Electric Vehicle loss Rs 7.97 crore.

Credit & Asset Quality ⚠️

• Non-provision of interest on NPA loans: Rs 37.98 crore (Q3) and Rs 110.41 crore (9M) standalone; Rs 49.55 crore (Q3) and Rs 144.06 crore (9M) consolidated.
• Total unprovided interest on NPA loans: Rs 1,026.92 crore standalone, Rs 1,356.71 crore consolidated.
• Statutory auditor issued qualified limited review reports due to non-provision of interest on NPA loans.
• Company defaulted Rs 16 crore principal and Rs 2.68 crore interest to Invent Assets Securitisation in Sept and Dec 2025.
• Hans Ispat Ltd subsidiary in default since Dec 2019; recovery proceedings for Rs 122.28 crore initiated.
• Three loan accounts classified as NPAs with no settlement; one settlement revoked due to non-compliance.

Corporate & Legal 🧾

• Debt reduction of Rs 23.44 crore expected on No Dues Certificate from Rare Asset Reconstruction Ltd.
• GST demand of Rs 0.52 crore for FY19 under dispute; appeal pending.
• Rs 9.35 crore provision made for gratuity and compensated absences due to new Labour Codes effective Nov 21, 2025.
• Pending litigations and regulatory proceedings against company and directors across multiple authorities.
• Material going concern uncertainties for subsidiaries Bhaskarpara Coal, Shree Ram Electro Cast, and Hans Ispat.

Corporate Actions & Governance 📍

• Board approved unaudited standalone and consolidated Q3 and 9M FY26 results on February 11, 2026.
• Internal auditor changed to M/s. G. K. Choksi & Co. from April 1, 2026 to March 31, 2027.

Business Model & Segments 🏢

• Business segments: Engineering & Technologies, Special Steel, Electric Vehicle.
• Key revenue from Special Steel and Engineering divisions.

Financial Performance 📊

• Unaudited standalone and consolidated results approved for Q3 and nine months ended 31 Dec 2025.
• Standalone net loss after tax: Rs (29.54) crore; consolidated net loss: Rs (29.29) crore for nine months.
• Earnings per share (basic & diluted) standalone: Rs (23.19); consolidated: Rs (22.99) for nine months.
• Segment revenues for nine months: Engineering & Technologies Rs 798.07 crore; Special Steel Rs 1,737.40 crore; Electric Vehicle Rs 28.57 crore.
• Total comprehensive loss for nine months: standalone Rs (31.63) crore; consolidated Rs (31.38) crore.

Governance and Appointments 📍

• M/s. G. K. Choksi & Co. appointed Internal Auditor from 1 April 2026 to 31 March 2027.
• M/s. N R P S & Associates LLP ceased as Internal Auditor effective 31 March 2026.

Regulatory and Compliance Matters ⚠️

• Non-provision of interest on NPAs understates net loss by Rs 110.41 crore standalone and Rs 144.06 crore consolidated for nine months.
• Total unprovided interest on NPAs as of 31 Dec 2025: Rs 1,026.92 crore standalone; Rs 1,356.71 crore consolidated.
• Default in loan repayments: Rs 16 crore principal and Rs 2.68 crore interest to Invent Assets Securitisation & Reconstruction Pvt Ltd.
• Pending reconciliation and no dues certificate with Rare Asset Reconstruction Ltd for Rs 23.44 crore debt reduction.
• GST demand of Rs 0.52 crore for FY 2018-19 under appeal.
• Material uncertainties on going concern for subsidiaries Bhaskarpara Coal Company Ltd, Shree Ram Electro Cast Ltd, and Hans Ispat Ltd due to regulatory actions and asset auctions.

Auditor Remarks

• Statutory auditor qualified limited review reports due to non-provision of interest on NPAs.
• No modification of opinion on pending litigations, enquiries, and reconciliations.

Other Business Actions

• Rs 9.35 crore provision made for gratuity and compensated absences due to new Labour Codes.