Urja Global Ltd| Quarterly Financial Results Q3 FY 2025-26

BEARISH SENTIMENT

⬤2nd Feb 26

Summary : Urja Global faces severe governance and financial reporting issues, including significant regulatory penalties, undocumented assets, unaccrued interest on promoter loans, and unaudited subsidiary financials, leading to a highly uncertain financial outlook despite segment revenue.

Quarterly Report Analysis & Insights

Financial Disclosures

Standalone Q3 FY25: Total Expenses Rs. 3,996.00 Lakh (including Purchase of stock Rs. 1,763.43 Lakh, Change in Inventory Rs. (468.27) Lakh, Other expenses Rs. 1,403.61 Lakh).
Consolidated Q3 FY25: Total Expenses Rs. 1,451.20 Lakh (including Purchase of stock Rs. 1,625.55 Lakh, Change in Inventory Rs. (382.69) Lakh, Other expenses Rs. 95.44 Lakh).
Total outstanding receivables Rs. 70.59 Cr and payables Rs. 43.31 Cr as on 31.12.2025.
Receivables worth Rs. 67.15 Cr and Payables worth Rs. 36.03 Cr are aged more than 180 days.
Sundry Debtors (Rs. 1.50 Cr) lack party/invoice details, hindering recoverability.
Standalone Q3 FY25: Revenue from operations Rs. 1,451.21 Lakh, Other Income Rs. 13.57 Lakh.
Consolidated Q3 FY25: Revenue from operations Rs. 1,461.42 Lakh, Other Income Rs. 14.46 Lakh.
Segment-wise (Consolidated Q3 FY25): Electric Vehicles Rs. 1,434.70 Lakh, Renewable Energy Rs. 18.14 Lakh, Batteries Rs. 8.59 Lakh.
Numerous demand orders and penalties from GST, Income Tax, and SEBI, totaling significant amounts (e.g., Rs. 17.21 Cr, Rs. 17.02 Cr, Rs. 3.89 Cr, Rs. 14.97 Cr, Rs. 44.14 Cr from GST/Income Tax, Rs. 90 lakh from SEBI).
Paid up equity share capital (Standalone & Consolidated): Rs. 5,339.01 Lakh.
Consolidated Segment Assets (9M FY25): Electric Vehicle Rs. (2,395.50) Lakh, Renewable Energy Rs. 1,675.91 Lakh, Batteries Rs. 711.97 Lakh.
Consolidated Segment Liabilities (9M FY25): Electric Vehicle Rs. (7.09) Lakh, Renewable Energy Rs. (1,285.01) Lakh, Batteries Rs. 1,251.46 Lakh.
Consolidated Capital Employed (9M FY25): Electric Vehicle Rs. (2,388.42) Lakh, Renewable Energy Rs. 2,960.92 Lakh, Batteries Rs. (539.49) Lakh.
Loan from Promoter Company 'Nandanvan Commercial Pvt Ltd' (Rs. 24.02 Cr) with no interest accrued since inception.
Lent Rs. 5.44 Cr to individuals/corporate entities, management claims not related parties, avoiding SEBI disclosure.
Both standalone and consolidated financial results are presented.
Consolidated results include unaudited, management-certified financials of three subsidiaries.

Corporate Overview

India (primary operations, registered office)
London, UK (newly incorporated foreign subsidiary)
Numerous legal and regulatory issues, including significant GST, Income Tax, and SEBI penalties.
Lack of documentary evidence for substantial investments and loans.
Uncertain recoverability of loans and advances.
Non-compliance with SEBI disclosure norms and Companies Act 2013.
Unverified long-outstanding liabilities and unaccrued interest on loans.
Difficulty in recovering receivables due to lack of details and confirmations.
Inclusion of unaudited subsidiary financial results in consolidated statements.
Operates in Electric Vehicles (EV, EV batteries, assembly, logistics, supply chain).
Involved in Renewable Energy (solar panels).
Manufactures Batteries (inverter, E-rickshaw, solar batteries, logistics, supply chain).
Formal and factual, primarily reporting board meeting outcomes and financial results.
Electric Vehicles
Renewable Energy
Batteries
Incorporation of a foreign wholly-owned subsidiary company in London, UK.
Investment in Mines Projects classified as capital work in progress (though undocumented).

Risk Factors

Significant regulatory penalties and demands.
Lack of documentation for assets.
Uncertain recoverability of receivables.
Unaudited subsidiary financial statements.

Key Drivers

New foreign subsidiary in London.
Appointed new Company Secretary.
Quarterly financial results approved.
Expanding into Electric Vehicles.

Auditor’s Report

Modified conclusion (not an audit opinion), stating nothing came to attention causing belief of material misstatement, *except for matters highlighted in paragraph 4*.
No documentary evidence for Rs. 46.35 Cr investment in Mines Projects and other loans/advances.
Non-reversal of GST Input Tax Credit (Rs. 34.24 Cr) due to non-payment to sundry creditors.
Non-accrual of interest on significant loans (Rs. 24.02 Cr from promoter, Rs. 4.12 Cr and Rs. 1.32 Cr from others).
Lack of party/invoice details for Sundry Debtors (Rs. 1.50 Cr), impacting recoverability.
Pending liabilities (Rs. 34.25 Cr) outstanding for over 2 years, with unverified validity.
Significant outstanding receivables (Rs. 70.59 Cr) and payables (Rs. 43.31 Cr), with large portions over 180 days, lacking ledger confirmations.
Numerous legal/regulatory notices, demand orders, and penalties from GST, Income Tax, and SEBI (including Rs. 90 lakh SEBI penalty for disclosure non-compliance).
Consolidated results include unaudited, management-certified financial results of three subsidiaries (Urja Batteries, Urja Digital World, Sahu Minerals & Properties) contributing Rs. 15.26 Cr revenue and Rs. 2.20 Cr profit for the quarter.

Board Commentary

Appointment of Mrs. Sakshi Arora as Company Secretary, Compliance Officer, and Key Managerial Personnel, effective February 2, 2026.
Lack of documentary evidence for significant investments and loans.
Non-accrual of interest on loans, including from a promoter company.
Non-reversal of GST Input Tax Credit due to non-payment to creditors.
Unverified long-outstanding liabilities.
Significant regulatory non-compliance and associated penalties.
Numerous GST, Income Tax, and SEBI non-compliances, demand orders, and penalties.
SEBI imposed a penalty of Rs. 90 lakh on the company and 15 related entities (including directors/KMP/promoters) for disclosure failures.
Investment in Mines Projects (Rs. 46.35 Cr) classified as capital work in progress, but lacking documentary evidence.
Incorporation of a foreign wholly-owned subsidiary in London, UK.

Corporate Governance

Concerns arise from related party transactions (unaccrued interest on promoter loans, lending to entities claimed not related parties).
SEBI penalty imposed on directors, KMP, and promoters for disclosure failures.
Audit committee reviewed the financial results.
Lack of documentary evidence for significant investments and loans.
Non-accrual of interest on promoter loans and other loans/advances.
Lending to individuals/corporate entities without proper related party disclosure.
SEBI penalty on company, directors, KMP, and promoters for disclosure non-compliance.
Inclusion of unaudited, management-certified financial results of subsidiaries in consolidated statements.
Inability to verify validity of long-outstanding liabilities and lack of ledger confirmations for trade receivables/payables.

Management Discussion & Analysis

Future Strategy

Expanding international presence with a UK subsidiary.

Operational Focus Areas

Auditors suggest implementing proper SOPs for timely debt collection and creditor payments.

Risk Control Measures

Company has filed appeals against several demand orders and penalties.
Management claims some penalties have been deleted by tax authorities.
Management has responded to GST search notices.

Critical Risks

Significant legal and regulatory penalties from GST, Income Tax, and SEBI.
Lack of documentary evidence for major investments and loans, impacting recoverability.
Non-compliance with SEBI listing regulations and Companies Act.
Inclusion of unaudited subsidiary financial results in consolidated statements.
Risk to cash flow and net worth due to unrecoverable debtors and unverified liabilities.