Company Overview
Kothari Industrial Corporation Limited reported significantly worsened financial performance for FY 2025-26, with a consolidated net loss of ₹721.85 crore compared to ₹161.68 crore in FY25, despite revenue increasing to ₹1,783 crore.
Financial Performance
Standalone Results: The holding company reported a standalone net loss of ₹311.91 crore (FY25: ₹161.68 crore loss) with revenue of ₹181.74 crore. Consolidated Results: The consolidated net loss reached ₹721.85 crore, primarily driven by a ₹409.95 crore loss share from associate Phoenix Kothari Footwear Private Limited, in which the company invested ₹138.96 crore for a 30% stake.
Business Developments & Acquisitions
The company completed two major transactions: 1) Acquisition of Parveen Roadways' logistics business for ₹24.04 crore, recognizing goodwill of ₹11.93 crore and adding over 100 vehicles and 500 employees; 2) Investment in Phoenix Kothari Footwear, which is still in pre-commercialization phase. The company also paid ₹32.13 crore plus interest for land acquisition in Melur, Tamil Nadu for footwear manufacturing.
Auditor Qualifications & Governance Issues
Auditors M/s. Ray & Ray issued a qualified opinion highlighting multiple concerns: 1) Non-provision of royalty payable to Royer Group (EUR 189,048); 2) ₹80.77 lakhs government subsidy receivable outstanding for over 8 years without documentation; 3) Missing balance confirmations for significant amounts; 4) GST reconciliation issues with ₹10.41 crore input credit and ₹10.55 crore output liability; 5) Inventory valuation concerns for ₹10.98 crore stock. Secretarial audit noted non-dematerialization of promoter shares as per SEBI LODR requirements.
Financing & Capital Structure
The company raised capital through preferential allotments of 1.53 crore shares, increasing share capital to ₹54.01 crore. Concerningly, the company obtained high-cost unsecured short-term loans of ₹51.83 crore at 24% interest from various parties while maintaining bank deposits earning significantly lower rates, resulting in substantial negative interest rate differential.
Corporate Actions & AGM
The 56th AGM was held electronically on September 30, 2026, to adopt financial statements and appoint Mr. R. Manoranjan as Independent Director. The company voluntarily delisted from Calcutta Stock Exchange effective June 2, 2026, while maintaining BSE listing.
Segment Performance & Contingencies
The company operates across multiple segments: Fertilizers (₹317.03 crore), Footwear (₹1,008.52 crore), Food Services (₹167.00 crore), and Logistics & Drone Services (₹270.82 crore). Significant contingent liabilities include income tax demands of ₹211.61 lakhs, GST demands of ₹66.27 lakhs, and land dispute proceedings for Coonoor property valued at ₹882.80 lakhs.
Management & Governance Changes
Multiple management changes occurred during FY26, including CFO change with Mr. V. Anand appointed on October 28, 2025, and several director appointments and resignations throughout the year. The company maintained that all related party transactions were conducted at arm's length basis.