Zenith Steel Pipes & Industries Ltd

Director changes

• Cessation as Independent Director upon completion of term, effective 24 August 2026.
• Ceases as Director and member of Board committees from 24 August 2026.
• Directorship held in Ok Play India Limited.
• Appointment of Mrs. Aradhana Nayak as Additional Director, Non-Executive Independent Director.
• Effective 24 August 2026; until ensuing General Meeting; independent term of 5 years subject to shareholders.
• Not related to any Director; not debarred by SEBI.
• Brief profile: Postgraduate; Diploma in Electronics and Telecommunication Engineering; analytical/technical experience.

Standalone results

• Standalone revenue from operations: 706.75; total income: 873.08 Lakhs.
• Standalone PBT before exceptional items: 35.06; PAT: 33.12; EPS: 0.02.
• Standalone expenses include raw materials 303.05; inventories change (131.43); employee 112.28.
• Inventory value 669.96 Lakhs noted; manual valuation; internal controls to be strengthened.
• Auditor’s limited review issued a qualified conclusion; Emphasis on going concern; expects full operations by 31/08/2026.

Consolidated results

• Consolidated turnover 873.08; total income 884.07; PAT 43.83; EPS 0.03.
• Consolidated inventories 669.96; additions to assets (India) 23.35.
• Notes indicate going concern emphasis; overall Group is navigating revival and regulatory matters.

Geography & segment mix

• Primary segment: Pipes; India revenue 265.43 (products) + 427.14 (services).
• Exports from India: 25.17 (products); total standalone income from operations 717.74.
• Overseas subsidiaries include Zenith USA and Zenith Middle East; consolidation reflects group.

Key risks & outlook

• Negative net worth; going concern basis adopted; revival plans in progress.
• Regulatory matters: SEBI GDR debarment; SARFAESI actions; DRT hearing set for 19 Oct 2026.
• Zinc tank rupture in Q3 FY2025-26 led to temporary production suspension; resume targeted by 31/08/2026.
• MOU with TREPL for takeover of borrowings; debt assignment to ARCs; settlement ongoing.

Financial results approved

• Unaudited standalone results for quarter ended 30 June 2026 approved.
• Unaudited consolidated results for quarter ended 30 June 2026 approved.

Auditors and regulatory disclosures

• Independent auditors issued qualified conclusions on standalone and consolidated results.
• Going-concern uncertainty noted; management relies on revival plans.
• Trading window opens 48 hours after results release.
• SEBI GDR debarment; SAT order partially allowed; Supreme Court appeal pending.
• Deposits non-compliance under Companies Act; potential regulatory implications.
• Dormant bank accounts provision of ₹40.99 lakh.
• Balance confirmations and reconciliations pending; audit evidence limited.
• SARFAESI/DRT proceedings ongoing; next hearing 19 Oct 2026.
• TREPL MoU to settle borrowings; outstanding principal ₹9,295 lakh.
• Debt assignment to India SME ARC; total dues ₹1,189.41 crore.
• GST rectification order; penalty ₹0.79 lakh paid.
• Inventory valuation concerns; manual method; process to strengthen controls.

Operations and revival updates

• Zinc tank rupture caused production halt; resume by 31/08/2026.
• Quarter sales impacted due to production disruption.
• Zinc dross sale realized ₹91.06 lakh.
• Operations expected to be fully resumed by 31/08/2026.
• Plan to implement system-based inventory tracking.

Dematerialisation status and records update

• Dematerialisation requests up to 30 June 2026 were confirmed to depositories and listed on the exchange.
• Security certificates received for dematerialisation were mutilated and cancelled after verification.
• Depository name substituted as registered owner within 15 days of receipt.

Financial Performance 📊

• Standalone Q3 FY26 revenue from operations was Rs. 876.63 lakhs, down 36% QoQ; 9M revenue Rs. 3,568.98 lakhs, down 14% YoY.
• Consolidated Q3 FY26 revenue was Rs. 940.33 lakhs, down 33% QoQ; 9M consolidated revenue Rs. 4,208.43 lakhs.
• Standalone Q3 FY26 PBT was Rs. 122.39 lakhs vs loss of Rs. 16.82 lakhs in Q3 FY25; consolidated PBT Rs. 147.16 lakhs.
• Standalone Q3 FY26 PAT was Rs. 122.11 lakhs vs loss of Rs. 20.03 lakhs in Q3 FY25; consolidated PAT Rs. 146.88 lakhs.
• Basic and diluted standalone EPS was Rs. 0.09 in Q3 FY26 vs negative Rs. 0.01 in Q3 FY25; consolidated EPS Rs. 0.10.
• Foreign exchange gains included Rs. 121.90 lakhs in Q3 and Rs. 246.24 lakhs in 9M as other income.

Order Book & Segments 📦

• Single segment: Pipes; Q3 FY26 domestic sales Rs. 462.18 lakhs, export sales Rs. 383.01 lakhs.
• Consolidated results include subsidiaries Zenith USA and Zenith Middle East FZ-LLP; results unaudited but management certified.

Capex, Working Capital & Provisions 🧱

• Inventory valued at Rs. 521.76 lakhs as of 31/12/2025; manual valuation process ongoing.
• Public issue proceeds utilization nearly complete with Rs. 13,289 lakhs spent out of Rs. 13,500 lakhs approved.
• Provisions of Rs. 499.41 lakhs (Q3) and Rs. 1,754.42 lakhs (9M) reversed and recognized as other income.
• Provision of Rs. 41.07 lakhs made for frozen/non-operating bank accounts; reconciliation pending.
• New Labour Codes impact provisionally recognized at Rs. 3.78 lakhs under employee benefit expenses.

Risks & Legal ⚠️

• Net worth remains negative due to accumulated losses; company continues as going concern.
• Statutory auditors issued qualified review report citing non-compliance with Companies Act deposit rules and pending reconciliations.
• Legal dispute ongoing with consortium banks over Rs. 19,319 lakhs dues; next DRT hearing on 30/06/2026.
• Fraud of Rs. 758 lakhs by ex-accountant identified; investigation and FIR filed.
• Multiple GST demand notices totaling ~Rs. 81.82 lakhs under appeal.
• Trade receivables/payables and other balances pending reconciliation; management expects no material discrepancies.
• MSME vendor status confirmations pending; no provision made for interest liability under MSMED Act.

Corporate Actions & Agreements 🗒️

• MoU with Tribus Real Estate Pvt. Ltd. for takeover of secured loans of Rs. 15,894.92 lakhs; TREPL authorized to negotiate settlements.
• Board meeting on 10th Feb 2026 approved unaudited standalone and consolidated Q3 and 9M FY26 results.

Financial Performance

• Approved unaudited standalone and consolidated results for Q3 and nine months ended Dec 31, 2025.
• Standalone total income Rs. 6,146.00 lakhs; profit after tax Rs. 274.36 lakhs (9 months).
• Consolidated total income Rs. 6,209.70 lakhs; profit after tax Rs. 299.11 lakhs (9 months).
• Basic and diluted EPS: standalone Rs. 0.15; consolidated Rs. 0.21 (9 months).
• Other income includes foreign exchange gains of Rs. 121.90 lakhs (Q3) and Rs. 246.24 lakhs (9 months).

Significant Board Decisions

• Provisions for frozen bank accounts: Rs. 41.07 lakhs (standalone), Rs. 43.71 lakhs (consolidated).
• Reversal of provisions recognized as other income: Rs. 499.41 lakhs (Q3), Rs. 1,754.42 lakhs (9 months).
• MoU with Tribus Real Estate Pvt. Ltd. for takeover and settlement of secured loans totaling Rs. 15,894.92 lakhs.
• Inventory valued at Rs. 521.76 lakhs using weighted average cost; manual valuation for finished goods and WIP.
• GST demand notices of Rs. ~81.82 lakhs for FY 2019-20 to 2021-22; appeals filed, no further communication.
• Identified fraud by ex-accountant involving Rs. 758 lakhs; investigation ongoing.

Regulatory, Legal, and Compliance Matters ️

• SEBI order partially lifted; penalty reduced from Rs. 10 crores to Rs. 25 lakhs; matter pending in Supreme Court.
• SARFAESI proceedings for Rs. 19,319 lakhs dues; symbolic asset possession; next hearing June 30, 2026.
• Non-compliance with Companies Act on public deposits and liquid assets noted.
• Pending reconciliation of trade receivables, payables, loans, and advances; no expected material discrepancies.
• MSME status not confirmed for all vendors; no provision for interest liability under MSMED Act.

Auditor Remarks

• Qualified review reports citing non-compliance on deposits, reconciliations, frozen bank accounts, and going concern uncertainty.
• Emphasis on MoU with Tribus Real Estate, SEBI litigation, SARFAESI proceedings, provision reversals, and identified fraud.
• Unable to verify inventory valuation due to lack of documentation.
• Auditor’s conclusion unmodified except for stated qualifications and emphasis of matter.

Other Business Actions ️

• Shareholders approved variation in utilization of Rs. 13,500 lakhs public issue proceeds for manufacturing at Chennai or other locations.
• Provisional additional employee benefit expense of Rs. 3.78 lakhs recognized due to new Indian Labour Codes.
• Prior period figures regrouped/reclassified for comparability.