AJR Infra flags going-concern uncertainty over Rs 1,130 crore gap

AJR Infra and Tolling Limited reported material uncertainty over its ability to continue as a going concern at September 30, 2026, after current liabilities exceeded current assets by Rs 1,130.2341 crore. The company cited a continuing cash-flow mismatch, liquidity pressure, stressed projects and unresolved litigation, while management retained the going-concern accounting basis.

Why has AJR Infra reported a going-concern uncertainty?

AJR Infra reported the uncertainty because its current liabilities exceeded current assets by Rs 1,130.2341 crore at September 30, 2026, while its projects remained subject to litigation, arbitration or negotiations. Management said the liquidity crunch was affecting operations with increasing severity and planned resolutions had been pending for a long time without concluding in its favour.

N V C & Associates LLP, in its limited-review report dated November 6, 2026, said these conditions indicate material uncertainty that may affect AJR Infra’s ability to continue as a going concern. The auditor specifically referred to defaults towards lenders, financial obligations towards a subsidiary, stressed special-purpose vehicle projects and the dependence on favourable legal outcomes. Its conclusion on the September 2026 standalone results was not qualified.

Management said the going-concern assumption and the carrying values of assets and liabilities remained appropriate for the standalone financial statements. AJR Infra therefore made no adjustments for outcomes that could arise from the uncertainties identified in Note 5. This is management’s accounting assessment, while the auditor separately highlighted the risk factors underlying the material uncertainty.

How large is AJR Infra’s short-term liability mismatch?

AJR Infra’s standalone current liabilities were Rs 1,150.0346 crore at September 30, 2026, compared with Rs 1,146.9567 crore at March 31, 2026. The September balance included Rs 945.7788 crore of other financial liabilities, Rs 145.3453 crore of other current liabilities and Rs 44.5579 crore of provisions.

The company’s September 30, 2026 current assets can be derived at Rs 19.8005 crore from the disclosed Rs 1,130.2341 crore excess of current liabilities over current assets. Cash and cash equivalents were Rs 38.85 lakh, up from Rs 2.69 lakh at March 31, 2026, while bank balances fell to Rs 4.5853 crore from Rs 4.7314 crore.

AJR Infra’s standalone equity was negative Rs 1,019.0904 crore at September 30, 2026, compared with negative Rs 1,020.1733 crore at March 31, 2026. The Rs 1.0829 crore improvement corresponds with the reported profit after tax for the half year, but does not remove the short-term mismatch identified by management and the auditor.

What did AJR Infra report for September 2026 earnings and cash flow?

AJR Infra reported standalone total income of Rs 10.6476 crore for the half year ended September 30, 2026, entirely from other income, and profit after tax of Rs 1.0829 crore. In the half year ended September 30, 2025, total income was Rs 9.2442 crore and profit after tax was Rs 307.7504 crore, including exceptional income of Rs 313.1927 crore.

Profit before tax and exceptional items was Rs 1.11 crore in the latest half year, compared with a loss of Rs 5.8305 crore a year earlier. Finance cost rose to Rs 2.0841 crore from Rs 1.8073 crore, while other expenses declined to Rs 6.4545 crore from Rs 12.2878 crore. AJR Infra classifies its operations as one Infrastructure Development segment operating in India.

Operating activities used Rs 6.3259 crore in the September 2026 half year, despite the accounting profit, compared with Rs 26.1771 crore used a year earlier. Investing activities generated Rs 7.7998 crore, including Rs 4.1088 crore of dividend received and Rs 3.4758 crore of intercorporate-loan refunds. The prior-year exceptional income arose from a provision reversal and unamortised guarantee commission recognised after a one-time settlement involving Sidhi Singrauli Road Projects Limited.

Which AJR Infra project exposures are linked to the uncertainty?

AJR Infra identified its exposure to Patna Highway Projects Limited, or PHPL, as a material matter. PHPL entered corporate insolvency proceedings in January 2020, and the National Company Law Tribunal approved Silver Point’s resolution plan on May 10, 2022. AJR Infra said it lost control of PHPL and fully provided its Rs 212.9465 crore funded exposure for accounting purposes while continuing litigation.

Phoenix ARC Private Limited invoked a Rs 1,190.2439 crore corporate guarantee on November 7, 2023. AJR Infra has not accounted for that invocation because the matter remains in litigation. The National Company Law Appellate Tribunal hearing on Phoenix ARC’s appeal was adjourned to November 27, 2026, while an application filed by AJR Infra against Corporation Bank, now merged with Union Bank of India, was scheduled before the National Company Law Tribunal in Delhi on November 23, 2026.

AJR Infra also disclosed Rs 98.1102 crore of remaining non-funded special-purpose vehicle exposure associated with Rajahmundry Godavari Bridge Limited. It has accounted Rs 697.0953 crore, net of recoveries, as current financial liabilities from guarantee invocation. A recovery officer granted a stay on recovery on July 7, 2026, and the next listed hearing was November 26, 2026.

For Indira Container Terminal Private Limited, AJR Infra disclosed Rs 48.3842 crore of funded exposure and a Rs 35 crore bank guarantee. It transferred control to new management during 2024-25 following a one-time settlement, retaining beneficial interest in 16.29% of equity instruments. Management said it was taking steps to replace the bank guarantee with a guarantee from new investors.

What is AJR Infra’s exposure to Pravara Renewable Energy?

AJR Infra said it had already provided for its entire funded exposure to Pravara Renewable Energy Limited, while its non-funded exposure was Rs 191.67 crore at September 30, 2026. Pravara developed a 30 megawatt cogeneration project under a 25-year Build-Own-Operate-Transfer concession beginning from its commercial operation date.

The filing states that Karkhana took possession of the plant and operated it without the special-purpose vehicle’s authorisation or consent. AJR Infra said the vehicle had no access to the project’s cash flows or transaction records and management considered it to have effectively lost control under Indian Accounting Standard 110. Pravara’s statutory auditors have issued a disclaimer of opinion since the year ended March 31, 2024.

A bank filed auction disclosures on January 5, 2026 after an interim application before the Debt Recovery Tribunal in Mumbai. Pravara then sought time to amend its securitisation application, and the matter was listed for compliance on December 9, 2026. A separate Debt Recovery Tribunal matter in Delhi was adjourned to November 5, 2026 for disposal of pending applications.

Conclusion

AJR Infra’s September 2026 standalone filing combines a Rs 1,130.2341 crore short-term liability excess with negative operating cash flow of Rs 6.3259 crore, defaults identified by the auditor and substantial guarantees or non-funded exposures connected with distressed projects. The auditor did not qualify its review conclusion, but said these conditions create material uncertainty over the company’s ability to continue as a going concern.

The next events to watch are the November 23, 2026 National Company Law Tribunal hearing involving PHPL, the November 26, 2026 recovery matter, the November 27, 2026 appellate hearing on the PHPL guarantee dispute, and Pravara’s December 9, 2026 compliance listing. Management’s assessment depends on resolutions and favourable decisions in proceedings that the filing says have remained unresolved for an extended period.