Company Overview

Covance Softsol Limited (Scrip Code: 544361) filed its 3rd Annual Report for FY 2025-26, reporting exceptional financial performance with consolidated revenue surging 181% to ₹145.96 crore and net profit increasing 184% to ₹34.38 crore. Earnings per share (EPS) rose to ₹18.46 from ₹6.17 in the previous year, driven by strong operational performance and a reduction in weighted average shares outstanding.

Financial Performance Highlights

Consolidated Performance (₹ lakhs)

  • Revenue from Operations: ₹14,596.28 (FY 2024-25: ₹10,169.61) - 44% increase
  • Other Income: ₹1,078.02 (FY 2024-25: ₹1,067.70)
  • Total Revenue: ₹15,674.30 (FY 2024-25: ₹11,237.31)
  • Profit Before Tax: ₹4,650.68 (FY 2024-25: ₹1,643.79)
  • Profit After Tax: ₹3,437.78 (FY 2024-25: ₹1,211.78)
  • EPS (Basic & Diluted): ₹18.46 (FY 2024-25: ₹6.17)

Standalone Performance (₹ lakhs)

  • Revenue from Operations: ₹7,968.07 (FY 2024-25: ₹2,836.55) - 181% increase
  • Profit After Tax: ₹3,169.98 (FY 2024-25: ₹1,025.19)

Capital Structure & Corporate Actions

  • Authorized Share Capital: Increased from ₹15.00 crore to ₹27.00 crore
  • Paid-up Share Capital: ₹22.14 crore comprising 2,21,45,533 equity shares
  • Rights Issue: Allotted 73,81,844 equity shares on September 22, 2025
  • Shareholding Pattern: 100% shares dematerialized as of March 31, 2026
  • Major Shareholders: Durga VLK Madala (64.74%), Talluri Samatha (22.52%), Bhaskara Rao Madala (5.09%)
  • No dividend recommended for FY 2025-26

Investments & Financial Position

  • Level 1 Financial Assets (mutual funds, quoted investments): ₹293.85 lakhs
  • Level 3 Financial Assets (venture capital fund): ₹20,220.36 lakhs, up significantly from ₹14,354.39 lakhs in FY25
  • Financial Assets by Category: FVTPL: ₹293.85 lakhs, FVOCI: ₹1,064.71 lakhs, Amortised cost: ₹7,129.13 lakhs
  • Trade Receivables: ₹3,471.28 lakhs, all past due but not impaired (less than 180 days)

Subsidiary Performance

  • SoftSol Resources Inc, USA (100% subsidiary):
  • Revenue: US$12.33 million (FY 2024-25: US$11.24 million)
  • Net Profit: US$0.30 million (FY 2024-25: Net Loss of US$0.22 million)
  • Significant contribution to consolidated revenue

Risk Management & Compliance

  • Credit Risk: Managed through credit approvals and continuous monitoring; no material credit risk identified
  • Liquidity Risk: Principal sources are cash flows from operations; no long-term borrowings or working capital facilities required
  • Market Risk: Exposure to foreign exchange risk as significant revenues are in US$
  • Regulatory Compliance: All SEBI LODR requirements complied with; no material orders from regulators/courts
  • No fraud reported by auditors under Section 143(12) of Companies Act, 2013

Related Party Transactions

  • Loan from Madala Holdings Limited: ₹3,460.30 lakhs outstanding as of March 31, 2026
  • Loan Repaid to Entity under common control: ₹3,831.68 lakhs during FY26
  • Rent Paid: ₹87.56 lakhs
  • Interest Paid: ₹306.95 lakhs
  • All transactions at arm's length and in ordinary course of business

Corporate Governance & Management

  • AGM Details: September 30, 2026 via video conference; cut-off date September 23, 2026
  • Board Reappointment: Recommended reappointment of Srinivasa Rao Madala as director
  • Key Management Changes: Aravind Kumar Madala appointed as Additional Director; Chandana Konduru as Company Secretary
  • Auditors: M/s. Pavuluri & Co. (statutory) and M/s. B S S & Associates (secretarial) provided unmodified reports
  • Employee Strength: 175 employees as of March 31, 2026