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KHFM Hospitality & Facility Mgt. Services Ltd

| Standalone Audited Financial Results – Q4 & FY26

NEUTRAL SENTIMENT

Report Source

⬤9th Jun 26

Summary : KHFM reported FY26 results with unmodified audit, highlighting contingent liabilities and contract asset challenges.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Standalone Total Expenses: 9,647.91 lakhs (FY26).
  2. Consolidated Total Expenses: 10,375.97 lakhs (FY26).
  3. Employee Benefit Expense is the largest expense component.
  4. Trade receivables balances subject to third-party confirmations.
  5. Standalone Revenue from Operations: 9,926.99 lakhs (FY26).
  6. Consolidated Revenue from Operations: 10,695.76 lakhs (FY26).
  7. Other Income (Standalone: 49.24 lakhs, Consolidated: 60.97 lakhs).
  8. Standalone Net Cash from Operating Activities: (640.32) lakhs (FY26).
  9. Consolidated Net Cash from Operating Activities: (640.77) lakhs (FY26).
  10. Standalone Closing Cash and Equivalents: 14.52 lakhs (FY26).
  11. Consolidated Closing Cash and Equivalents: 21.41 lakhs (FY26).
  12. Standalone: Rs. 3,009.39 lakhs (Service tax, GST, ESIC, Income Tax, bank guarantees).
  13. Consolidated: Rs. 3,009.39 lakhs (Service tax, GST, ESIC, Income Tax, bank guarantees).
  14. Standalone Total Assets: 11,445.85 lakhs (FY26).
  15. Consolidated Total Assets: 11,993.67 lakhs (FY26).
  16. Standalone Total Equity: 6,723.87 lakhs (FY26).
  17. Consolidated Total Equity: 6,733.72 lakhs (FY26).
  18. Consolidated results include KHFM Infra Projects and KHFM & DP Jain Company.
  19. Consolidated revenue and profit are higher than standalone.
  20. Consolidated assets are higher than standalone.
  21. Cash flow from operations is negative for both.

Corporate Overview

  1. Primarily operates within India.
  2. Managing significant contingent liabilities from various taxes.
  3. Uncertainty regarding outcome of legal litigations.
  4. Recoverability of contract assets requiring professional judgment.
  5. Evaluating impact of labor law changes on employee benefits.
  6. Provides hospitality and facility management services.
  7. Services include housekeeping, guest house, property management.
  8. Also offers pest control, front office, gardening, building maintenance, catering.
  9. Formal and informative, announcing financial results and board meeting outcomes.
  10. Revenue from Operations
  11. Other Income

Risk Factors

  1. Significant contingent liabilities exist.
  2. Recoverability of contract assets uncertain.
  3. Impact of labor law changes pending.
  4. Negative cash flow from operations.

Key Drivers

  1. Unmodified audit opinion received.
  2. Capital infusion from warrant conversion.
  3. Growth in hospitality and facility management.
  4. Management confident in asset recoverability.

Auditor’s Report

  1. Unmodified opinion on standalone and consolidated financial results.
  2. Contingent liabilities of Rs. 3,009.39 lakhs (standalone and consolidated).
  3. Balances of trade receivables, payables, loans & advances subject to third-party confirmations.
  4. Contract Assets of Rs. 3906.66 lakhs (standalone) and Rs. 3941.84 lakhs (consolidated) requiring judgment.
  5. Impact of labor law requirements on employee benefit obligations pending evaluation.
  6. Non-audit of KHFM Infra Projects Private Limited and KHFM & DP Jain Company financials (consolidated report).
  7. Contingent liabilities from disputed Service tax, GST, ESIC, Income Tax, bank guarantees.
  8. Balances of trade receivables, payables, loans & advances subject to third-party confirmations.
  9. Contract Assets requiring enhanced professional judgment for recoverability.
  10. Impact on Labour law requirements on employee benefit obligations pending evaluation.
  11. Consolidated report includes unaudited subsidiary financials (KHFM Infra, KHFM & DP Jain).

Board Commentary

  1. Significant contingent liabilities from various taxes and guarantees.
  2. Uncertainty in litigation outcomes.
  3. Recoverability of contract assets.
  4. Impact of labor law changes on employee benefits.
  5. Contingent liabilities from disputed Service tax, GST, ESIC, Income Tax.
  6. Contingent liabilities from bank guarantees.

Corporate Governance

  1. Adheres to ICAI Code of Ethics.
  2. Audit Committee reviewed and approved results.

Management Discussion & Analysis

Risk Control Measures

  1. Management believes litigation outcomes will be favorable.
  2. Management confident third-party confirmations won't impact financials.
  3. Requisite provisions made for contract assets.
  4. Evaluation process underway for labor law impact.

Critical Risks

  1. Contingent liabilities from various legal and regulatory issues.
  2. Uncertainty in litigation outcomes.
  3. Recoverability of contract assets.
  4. Impact of labor law changes on employee benefits.
KHFM Hospitality & Facility Mgt. Services Ltd (KHFM) Quarterly Report Analysis & Insights | Dhanarthi