Financial Performance
Sharika Enterprises Limited reported a consolidated net loss of ₹890.15 lakhs (₹89 crore) for FY26, significantly widening from a loss of ₹36.18 lakhs in FY25. Revenue from operations declined to ₹7,546.15 lakhs from ₹8,171.10 lakhs in the previous year. The standalone performance was even worse, with a loss of ₹770.51 lakhs compared to a profit of ₹97.19 lakhs in FY25. Key financial metrics deteriorated substantially: current ratio fell to 1.11 (from 1.35), debt-equity ratio increased to 1.32 (from 0.55), and net debt-to-equity ratio surged to 176.62% from 64.18%.
Audit Qualifications & Internal Controls
Statutory auditors M/s. R D V & Associates issued a qualified opinion citing three major issues: no provision for slow/non-moving inventory of ₹145.69 lakhs, unreconciled advances of ₹244.62 lakhs with uncertainty regarding recoverability, and no assessment of Expected Credit Loss on trade receivables of ₹5,417.79 lakhs. The audit report on internal financial controls expressed a modified opinion, citing material weaknesses in provisions assessment. Management defended their position, stating inventory is saleable, advances are recoverable, and receivables are from state utilities with certain recovery.
Capital Structure & Financing
The authorized share capital was increased from ₹2,200 lakhs to ₹3,500 lakhs to facilitate proposed capital infusion. The Board approved a preferential issue of equity shares and warrants, pending BSE in-principle approval, with no dividend declared for the year. Total borrowings surged to ₹2,647.05 lakhs from ₹1,575.63 lakhs, while cash balances stood at ₹319.10 lakhs. The company faces significant working capital challenges with high trade receivables and inventory levels.
Business Operations & Strategy
The company is transitioning from conventional EPC to technology-led power infrastructure and digital grid solutions. It secured key orders including: 998 communicable overhead Fault Passage Indicators for L&T's RDSS Varanasi SCADA project, first ADMS order from Uttarakhand Power Corporation (₹25 crores), and 33 kV Smart SF6 Load Break Switches for JSW Renew Energy. The order book stood at ₹8,741.52 lakhs as of March 31, 2026. The company is focusing on indigenous technology development through collaborations with SPIN Engenharia (Brazil) and Nayon Kontrol System (Philippines).
Subsidiaries & Corporate Structure
The consolidated entity includes subsidiaries Sharika Spintech Private Limited, Sharika Smartec Private Limited, Contronics Switchgear India Private Limited, and joint venture Elettromeccanica India Private Limited. Most subsidiaries reported negative net assets, with Sharika Spintech showing accumulated losses of ₹507.71 lakhs despite ₹566.25 lakhs investment from the parent company.
Risk Factors & Challenges
Key risks include volatility in copper prices impacting project costs, long procurement cycles in utility projects, intense competition, and working capital requirements. The company is exposed to foreign exchange risk due to imported raw materials, though it remains a net foreign exchange earner. Contingent liabilities stood at ₹1,751.24 lakhs comprising bank guarantees and court cases.
Governance & Compliance
The company submitted its Annual Report to BSE under SEBI Regulation 34. The Board met 7 times during FY26, with changes including appointment of Sanjay Verma as Executive Director & CEO. Related party transactions were in ordinary course of business at arm's length. The company complied with corporate governance norms and had operational whistleblower policy with no complaints under Prevention of Sexual Harassment Act.