Nilachal Refractories Ltd (502294) Quarterly Report Analysis & Insights

Nilachal Refractories Ltd

| Audited Results for the Quarter & Year Ended March 31, 2026

⬤18th Apr 26

Summary : Nilachal Refractories faces significant going concern uncertainty due to continuing losses, negative net worth, and audit qualifications, with hopes for revival tied to a proposed change in control and incoming investor support.

Quarterly Report Analysis & Insights

Financial Disclosures

Total Expenses: ₹730.63 Lakhs (FY26)
Material Consumed/Purchases: ₹31.12 Lakhs (FY26)
Employee benefits expense: ₹28.18 Lakhs (FY26)
Finance Costs: ₹37.29 Lakhs (FY26)
Depreciation and Amortisation expense: ₹54.84 Lakhs (FY26)
Other Expenses: ₹505.68 Lakhs (FY26)
Revenue from Operations: ₹158.22 Lakhs (FY26)
Other Income: ₹79.77 Lakhs (FY26)
Net cash from operating activities: (-) ₹140.30 Lakhs (FY26)
Net cash from investing activities: ₹35.43 Lakhs (FY26)
Net cash from financing activities: ₹101.61 Lakhs (FY26)
Cash and cash equivalents at year end: ₹1.94 Lakhs (FY26)
Total Assets: ₹1,462.38 Lakhs (FY26)
Net Worth: (-) ₹3,279.16 Lakhs (FY26)
Current Liabilities exceed Current Assets by ₹1,365.17 Lakhs
Equity Share Capital: ₹2,036.14 Lakhs (FY26)
Other Equity: (-) ₹5,315.31 Lakhs (FY26)
Standalone Audited Financial Results

Corporate Overview

Registered Office: Kolkata, India
Works: Odisha, India
Continuing losses
Significant decline in level of operations
Negative net worth (₹3279.16 Lakh)
Current liabilities exceed current assets (₹1365.17 Lakhs)
Impairment losses on Capital Work in Progress and Plant & Machinery
Unredeemed preference shares and unprovided cumulative dividends
Dependence on proposed financial and operational support from incoming investor
Manufacturing of refractories (implied by company name)

Risk Factors

Material uncertainty regarding going concern.
Continuing losses and negative net worth.
Unfunded employee benefit obligations.
Unredeemed preference shares, unprovided dividends.

Key Drivers

Incoming investor provides financial support.
Change in control successfully completed.
Resolution of audit qualifications.
Improved operational performance and profitability.

Auditor’s Report

Qualified Opinion
Company has not obtained actuarial valuation for employee benefit obligations (Ind AS 19), obligations are unfunded, impact unquantifiable.
Company has not redeemed 11% Redeemable Cumulative Preference Shares due since September 2000.
No provision for cumulative dividends (₹73.38 lakhs up to March 2025, ₹1.65 lakhs for March 2026) on preference shares.
Loss for the year understated by ₹1.65 lakhs, reserves/surplus overstated by ₹75.03 lakhs due to unprovided dividends.
Impairment loss of ₹1933.88 lakhs on CWIP (FY2025) and additional ₹332.64 lakhs on CWIP/Plant & Machinery (FY2026).
Material Uncertainty Related to Going Concern due to continuing losses, negative net worth, and current liabilities exceeding current assets.
Dependence on proposed support from incoming investor for continued operations.

Board Commentary

Proposed change in control due to Share Purchase Agreement with incoming investor
No provision for cumulative dividends on preference shares due to financial constraints
Material uncertainty related to going concern
Financial constraints affecting dividend payments and share redemption
Non-compliance with Ind AS 19 for employee benefits valuation
Non-redemption of preference shares due since September 2000
Impairment loss on Capital Work in Progress (CWIP) and Plant & Machinery

Corporate Governance

Audit Committee considered results on 18.04.2026
Non-compliance with Ind AS 19 for employee benefits
Failure to redeem preference shares as per due date

Management Discussion & Analysis

Future Strategy

Proposed change in control via Share Purchase Agreement with incoming investor
Management expects financial and operational support from incoming investor

Operational Focus Areas

Continue operations with incoming investor support

Performance Drivers

Continuing losses and negative net worth are key performance indicators

Risk Control Measures

Expected financial and operational support from incoming investor
Proposed change in control to new investor

Critical Risks

Material uncertainty related to going concern
Continuing losses and negative net worth
Current liabilities exceeding current assets
Unfunded employee benefit obligations without actuarial valuation
Non-redemption of preference shares and unprovided dividends