Financial Performance
Shalimar Paints Limited reported a standalone net loss of ₹63.34 crore for FY26 (improved from ₹80.11 crore in FY25) with revenue declining to ₹569.03 crore from ₹599.06 crore. The company achieved positive EBITDA in Q4 FY26, showing operational improvement despite the annual loss. Consolidated performance showed a net loss of ₹64.95 crore with revenue of ₹575.63 crore. Accumulated losses stood at ₹543.73 crore (standalone) and ₹529.75 crore (consolidated), with current liabilities exceeding current assets by ₹65.48 crore.
Capital Restructuring and AGM
The company announced its 124th AGM on September 9, 2026, with 5 resolutions including a major capital restructuring plan to increase authorized share capital from ₹20 crore to ₹1,000 crore. This comprises 300 crore equity shares of ₹2 each (₹600 crore) and 200 crore non-cumulative non-participating compulsory convertible preference shares of ₹2 each (₹400 crore). The company also sought approval to make investments/loans/guarantees up to an aggregate limit of ₹30,000 crore under Section 186 of the Companies Act.
Operational Highlights
The company launched 8 new products contributing 8% of total revenue, expanded distribution with 100+ new distributors, and received the 'Most Trusted Brand' award for the second consecutive year. Decorative paints contributed 63% of total revenue, with water-based paints representing 64% of the decorative category. Manufacturing facilities in Chennai, Nashik, and Sikandrabad underwent modernization while maintaining NABL accreditation for its R&D lab and ISO certifications.
Audit Observations and Regulatory Issues
Auditors noted discrepancies in quarterly returns filed with banks for working capital limits (₹185.17 crore sanctioned limit) showing differences ranging from ₹16.86 crore to ₹20.17 crore across quarters. The company has multiple tax disputes totaling ₹10.95 crore (income tax: ₹5.04 crore, GST: ₹3.56 crore, sales tax/VAT: ₹1.35 crore, ESI: ₹0.21 crore) pending with various authorities. The company received an arbitration award of ₹22.01 crore (net ₹20.01 crore after TDS) for the 2016 Nashik plant fire insurance claim, recorded as payable pending final court resolution.
Subsidiaries and Corporate Structure
The company has two subsidiaries: Shalimar Adhunik Nirman Limited (99.99% holding) dealing in land and properties, and IM Inicio Projects Private Limited (100% holding) trading in paints. The company advanced ₹5.51 crore in loans to subsidiaries during the year, with ₹11.86 crore outstanding. Promoter holding remained stable at 74.96%, with Hella Infra Market Limited as the majority holder at 52.85%.
Going Concern Assessment
Despite the challenging financial position, management affirms the going concern basis based on plans for asset monetization, availability of additional credit facilities under ECLGS 5.0 scheme, expected growth opportunities, and financial support committed by the holding company. Credit ratings stood at CARE BB+ (Negative) for long-term and CARE A4+ for short-term borrowings.