Don’t Trade in the Dark—Get Your Pre-Market Report Every Day.Join Now
Search stocks
SEPC Ltd

| Quarterly Financial Results Q3 FY 2025-26

BEARISH SENTIMENT

Report Source

⬤7th Feb 26

Summary : SEPC Limited reported Q3/9M FY26 consolidated net profit, but faces significant accumulated losses and a qualified auditor's review on key asset recoverability and ongoing legal disputes.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total Expenses for Q3 FY26: Rs 32,391.78 lakhs.
  2. Consolidated Total Expenses for 9M FY26: Rs 74,889.17 lakhs.
  3. Standalone Total Expenses for Q3 FY26: Rs 16,891.57 lakhs.
  4. Standalone Total Expenses for 9M FY26: Rs 38,862.82 lakhs.
  5. Breakdown includes cost of materials, employee benefits, finance costs, depreciation, and other expenses.
  6. Non-Current Contract Assets include overdue balances of Rs. 6,959.44 lakhs.
  7. Non-Current Trade Receivables include overdue balances of Rs. 495.18 lakhs.
  8. Consolidated Total Income from Operations (Net) for Q3 FY26: Rs 34,206.71 lakhs.
  9. Consolidated Total Income from Operations (Net) for 9M FY26: Rs 79,688.64 lakhs.
  10. Standalone Total Income from Operations (Net) for Q3 FY26: Rs 17,560.27 lakhs.
  11. Standalone Total Income from Operations (Net) for 9M FY26: Rs 41,029.55 lakhs.
  12. Segment-wise revenue for India and Rest of the World.
  13. Plans to meet financial obligations from cash flows from execution of orders.
  14. International arbitration award of Rs. 19,854.10 lakhs and SGD 372,754.79.
  15. NCDRC award of Rs. 26,501 lakhs against ECGC, pending appeal.
  16. Consolidated Equity Share Capital as of Dec 31, 2025: Rs 1,94,015.81 lakhs.
  17. Consolidated Reserves (excluding Revaluation reserve) as of previous year: Rs (5,762.63) lakhs.
  18. Standalone Equity Share Capital as of Dec 31, 2025: Rs 1,94,015.81 lakhs.
  19. Standalone Reserves (excluding Revaluation reserve) as of previous year: Rs (6,067.36) lakhs.
  20. Segment-wise Assets and Liabilities for India and Rest of the World.
  21. Financial results include 5 joint operations.
  22. Inter-se Arrangement with TCPL and Shri Housing Private Limited for indemnification.
  23. Both standalone and consolidated unaudited financial results are presented.
  24. Auditors' review report covers both standalone and consolidated results.

Corporate Overview

  1. Operations in India and Rest of the World.
  2. Subsidiary in Sharjah (SEPC (FZE)- Sharjah).
  3. Joint operations include projects in Basra, Iraq.
  4. Stalled projects due to regulatory approval delays.
  5. International arbitration proceedings and awards.
  6. Qualified audit opinion on Deferred Tax Assets and Non-Current Assets.
  7. Significant accumulated losses impacting going concern basis.
  8. Projects stalled due to delays in obtaining regulatory approvals.
  9. Engaged solely in Engineering, Procurement, and Construction (EPC) business.
  10. Management expresses confidence in recovering dues from stalled projects.
  11. Management confident of generating sufficient taxable profits to utilize DTA.
  12. Management confident no financial/legal liability from arbitration will devolve.
  13. One customer in stalled projects is undergoing liquidation process.
  14. One reportable segment: Engineering, Procurement and Construction (EPC).
  15. Segment-wise revenue reported for India and Rest of the World.

Risk Factors

  1. Uncertainty in asset recoverability.
  2. Projects stalled by regulatory delays.
  3. Potential arbitration liabilities.
  4. Significant accumulated losses.

Key Drivers

  1. Resolution plan implementation progressing.
  2. Equity infusion by new investor.
  3. Successful completion of rights issue.
  4. Execution of pipeline orders.

Auditor’s Report

  1. Qualified Review Conclusion.
  2. Inability to comment on carrying value of Deferred Tax Asset due to insufficient evidence for future taxable profits.
  3. Inability to comment on carrying value of Non-Current Contract Assets and Trade Receivables due to stalled projects and insufficient evidence for recoverability.
  4. Reliance on management-prepared unaudited interim financial results of 5 joint operations.

Board Commentary

  1. Change in management noted as a positive development.
  2. Recoverability of Non-Current Contract Assets and Trade Receivables.
  3. Uncertainty regarding Deferred Tax Asset utilization.
  4. Ongoing international arbitration and legal proceedings.
  5. Significant accumulated losses affecting going concern.
  6. International arbitration proceedings (SIAC Award, Madras High Court, Supreme Court).
  7. NCDRC complaint against Export Credit Guarantee Corporation of India Limited.
  8. Evaluation of impact from new Labour Codes.
  9. Allotment of 35,00,00,000 equity shares via rights issue.
  10. Conversion of partly paid-up equity shares into fully paid-up shares.
  11. Variation in objects of the Rights Issue approved.

Corporate Governance

  1. Audit Committee reviewed and Board of Directors approved financial results.
  2. Rights Issue Committee and Board approved share conversions and rights issue variations.
  3. Auditors' qualified review conclusion on key financial statement items.
  4. Reliance on management-certified financial results for joint operations.

Management Discussion & Analysis

Future Strategy

  1. Confident of recovering dues from stalled projects.
  2. Confident of generating taxable profits to utilize DTA.
  3. Plans to meet financial obligations from cash flows.

Industry Overview

  1. Positive future outlook for the Company.

Operational Focus Areas

  1. Recovering dues from stalled projects.
  2. Utilizing Deferred Tax Assets.
  3. Meeting future financial obligations.

Performance Drivers

  1. Implementation of resolution plan.
  2. Infusion of equity by investor.
  3. Completion of Rights issue.
  4. Change in management.
  5. Additional funding for working capital.
  6. Execution of pipeline of orders in hand.
  7. Sanctioned non-fund based facilities.

Risk Control Measures

  1. Management confident of recovering dues from stalled projects.
  2. Indemnification for arbitration liabilities.
  3. Management confident of utilizing DTA against future profits.
  4. Resolution plan, equity infusion, order pipeline to meet obligations.

Critical Risks

  1. Recoverability of Non-Current Contract Assets and Trade Receivables.
  2. Uncertainty regarding Deferred Tax Asset utilization.
  3. Ongoing international arbitration and legal proceedings.
  4. Significant accumulated losses affecting going concern.