Financial Analyst Summary: Gammon India Limited Q1 FY27 Results
Document Overview
This document comprises Gammon India Limited's unaudited financial results for the quarter ended June 30, 2026 (Q1 FY27), approved by the Board of Directors on August 10, 2026. It includes both standalone and consolidated financial statements along with the independent auditor's limited review report issued by N V C & Associates LLP. The filing is made pursuant to Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Key Financial Performance
Standalone Financial Results (₹ Crore):
- Total Income: ₹7.60 crore (Q1 FY27) vs ₹86.57 crore (Q4 FY26) vs ₹0.98 crore (Q1 FY26)
- Total Expenses: ₹295.66 crore (Q1 FY27) vs ₹354.13 crore (Q4 FY26) vs ₹289.71 crore (Q1 FY26)
- Loss Before Tax: ₹(288.06) crore (Q1 FY27) vs ₹(267.56) crore (Q4 FY26) vs ₹(288.73) crore (Q1 FY26)
- Loss After Tax: ₹(288.77) crore (Q1 FY27) vs ₹(267.68) crore (Q4 FY26) vs ₹(288.82) crore (Q1 FY26)
- Basic/Diluted EPS: ₹(7.83) (Q1 FY27) vs ₹(7.26) (Q4 FY26) vs ₹(7.83) (Q1 FY26)
Consolidated Financial Results (₹ Crore):
- Total Income: ₹287.00 crore (Q1 FY27) vs ₹53.38 crore (Q4 FY26) vs ₹128.25 crore (Q1 FY26)
- Total Expenses: ₹374.91 crore (Q1 FY27) vs ₹356.34 crore (Q4 FY26) vs ₹321.79 crore (Q1 FY26)
- Loss Before Tax: ₹(372.08) crore (Q1 FY27) vs ₹(303.12) crore (Q4 FY26) vs ₹(193.58) crore (Q1 FY26)
- Loss After Tax: ₹(372.75) crore (Q1 FY27) vs ₹(313.92) crore (Q4 FY26) vs ₹(193.63) crore (Q1 FY26)
- Basic/Diluted EPS: ₹(10.09) (Q1 FY27) vs ₹(8.47) (Q4 FY26) vs ₹(5.24) (Q1 FY26)
Auditor's Qualified Report and Key Issues
The independent auditor, N V C & Associates LLP, issued a qualified conclusion on both standalone and consolidated financial results citing several material uncertainties:
1. Claims Receivable Uncertainty (₹10.00 crore):
The company has retained claims amounting to ₹10.00 crore as at June 30, 2026, based on an independent expert's assessment of likely settlement in favor of the company. However, due to prolonged elapsed time and non-crystallization with counterparts, auditors cannot comment on the realizability of these amounts.
2. Disputed Penal Interest Charges (₹923.28 crore cumulative):
- Quarterly charges: ₹11.74 crore for Q1 FY27 (based on available loan statements)
- Cumulative breakdown: ₹403.50 crore levied by lenders + ₹519.78 crore levied by CFM Assets Reconstruction Company Private Limited (ARC)
- Management is disputing these charges and has not debited them to P&L, considering them contingent liabilities
- The company is in discussions with lenders/ARC for reversal, with ARC considering a settlement based on outstanding principal amount with waiver of interest and penal charges
3. Material Going Concern Uncertainty:
- Current liabilities exceed current assets by ₹12,988.80 crore (standalone) and ₹14,495.29 crore (consolidated) as at June 30, 2026
- Lenders recalled all loans and facilities, marked as NPA since June 2017
- Trading in equity shares is currently suspended
- Multiple winding-up petitions filed by creditors and recovery suits initiated by bankers
- Severe manpower issues and defaults on statutory and regulatory obligations
- More than 50% of debt assigned to two Asset Reconstruction Companies
- Company negotiating waiver of interest/penal charges and haircut on principal outstanding based on potential investor
- Resolution plan under consideration by lenders since 2021 with no significant progress
4. Emphasis of Matter - Arbitration Awards (₹532.91 crore):
The company has recognized ₹532.91 crore under trade receivables from arbitration awards in its favor, though clients have appealed to set aside these awards. Management is confident of recovery but realizability depends on final outcome of appeals.
5. Subsidiary Qualification - Ansaldo Caldaie Boilers India Pvt Ltd:
The subsidiary has not refunded ₹16.64 crore share application money despite RBI directive dated August 16, 2018, to refund the amount, citing operational issues.