Dharani Sugars Q1 FY27 Net Loss ₹199.68 Crore

Dharani Sugars and Chemicals Limited

Financial Performance Highlights

Quarter Ended June 30, 2026:

Total Income from Operations (Net): ₹49.76 lakh
Total Expenses: ₹992.27 lakh
Loss from Operations: ₹(942.51) lakh
Finance Cost: ₹1,054.26 lakh
Loss before tax: ₹(1,996.77) lakh
Net Loss for the period: ₹(1,996.77) lakh
Paid-up equity share capital: ₹4,151.43 lakh
Face value per share: ₹10.00

Comparative Performance:

March 31, 2026 (Audited): Net Loss ₹(4,470.26) lakh
June 30, 2025 (Unaudited): Net Loss ₹(2,058.36) lakh

Segment-wise Performance (Q1 FY27)

Revenue:

Unallocated segment only: ₹49.76 lakh
Sugar, Distillery, and Power segments reported zero revenue

Segment Results (Profit/Loss before tax and finance cost):

Sugar: ₹(632.58) lakh
Distillery: ₹(207.96) lakh
Power: ₹(151.73) lakh
Unallocated: ₹49.76 lakh
Total: ₹(942.51) lakh

Segment Assets (as of June 30, 2026):

Sugar: ₹28,131.33 lakh
Distillery: ₹7,774.26 lakh
Power: ₹8,387.46 lakh
Other unallocable corporate assets: ₹96.96 lakh
Total assets: ₹44,390.01 lakh

Segment Liabilities (as of June 30, 2026):

Sugar: ₹59,518.43 lakh
Distillery: ₹2,872.80 lakh
Power: ₹10,279.22 lakh
Total liabilities: ₹72,670.45 lakh

Critical Operational and Financial Challenges

Going Concern Uncertainty:

The Company has accumulated losses resulting in negative net worth as of June 30, 2026. Manufacturing facilities and operations have remained non-operational for a prolonged period. The Company has defaulted in repayment of certain borrowings and settlement obligations.

Master Restructuring Agreement Default:

Pursuant to withdrawal of CIRP proceedings, the Company entered into a Master Restructuring Agreement (MRA) dated May 24, 2024 with India Debt Resolution Company Limited (IDRCL), acting as trustee for NARCL
Unsustainable debt of ₹33,465 lakhs was disclosed as contingent liability
Company committed multiple breaches of repayment obligations and financial covenants under MRA
IDRCL issued Default Notice dated February 07, 2026 granting one month to cure defaults
Company could not remedy defaults within stipulated timeline
Restructuring arrangement stands cancelled and concessions/waivers withdrawn
Original outstanding dues including unsustainable debt of ₹33,465 lakhs have become payable
Company has not reclassified borrowings as current liabilities as lender has not recalled the loan
Company intimated default in repayment occurring on June 30, 2026 to stock exchanges on July 30, 2026

Sugar Development Fund Loan Default:

SDF Loan covered under One Time Settlement (OTS) sanctioned by Government of India for ₹6,111 lakhs
Repayment timeline extended to April 06, 2026 vide letter dated October 13, 2025
Company defaulted in repayment within extended timeline
SDF Authority issued letter dated April 22, 2026 cancelling OTS arrangement
Original liability with applicable interest has become payable
Financial impact of reinstatement being evaluated

Additional Borrowings and Defaults:

Obtained unsecured loans of ₹223.03 lakhs from corporate entities in the quarter
Total outstanding loans from Directors & related parties: ₹21,633.56 lakhs as on June 30, 2026
Loan from I Heart Properties Private Limited (August 2024): ₹2,470 lakhs for 4 months tenure
Entire loan amount of ₹2,996.21 lakhs (including interest of ₹526.21 lakhs) remains unpaid beyond due date

Investments:

Investment in Appu Hotels Limited: Carrying amount ₹1,455.39 lakhs as at June 30, 2026
Management assessing fair value and complying with Ind AS 113 disclosure requirements

Equity Share Status:

Issued 83,14,328 equity shares of ₹10 each in FY 2024-25 for consideration other than cash pursuant to debt resolution agreement with NARCL
Shares not admitted in dematerialised form and pending in-principle approval from stock exchanges
Equity shares suspended from trading on NSE and BSE since July 03, 2023 pursuant to NCLT liquidation proceedings initiation
NSE Circular Ref. No. 081.512073 dated June 30, 2023 notified suspension of trading

Statutory Dues:

Aggregating dues in respect of TDS, Employees Provident Fund, Employees State Insurance, Professional Tax, and Power Generation Tax remain unpaid
Delays due to liquidity issues
Company working on priority payment schedule to clear outstanding statutory dues

Auditor's Qualified Review Report

Srivatsan & Associates Chartered Accountants issued a limited review report with following qualifications:

1. Going Concern Uncertainty: Material uncertainty exists regarding company's ability to continue as going concern due to accumulated losses, negative net worth, non-operational facilities, and debt defaults

2. MRA Default Implications: Borrowings should be classified as current liabilities since concessions withdrawn and debts become payable, though not recalled by lender

3. Liquidity Constraints: Significant liquidity and cash flow constraints impact ability to recommence operations and meet obligations

4. Interest Provision Omission: Interest expense on director borrowings and intercorporate loans not provided for, resulting in understatement of finance costs and current liabilities

5. Sugarcane Farmer Dues: Second and final instalment aggregating ₹36.08 crores payable to ryots remained unpaid as at June 30, 2026

6. I Heart Properties Loan Default: Defaulted repayment of ₹2,996.21 lakhs including accrued interest of ₹526.21 lakhs

7. Investment Valuation: Carrying value of Appu Hotels investment not reflective of fair value as required under Ind AS 113

8. Balance Confirmations: Not provided with balance confirmations for trade receivables, trade payables, advances, and deposits

Management's Revival Plans

Management is actively undertaking various revival and recommencement measures including:

Arrangements for working capital and operational funding
Discussions with lenders and other stakeholders
Evaluating options for external funding and financial support infusion
Positive about revival and recommencement of operations
Expects improvement in operational and financial position in foreseeable future