Bihar Sponge Iron reports Rs 10.74 crore Q2 loss on nil sales

Bihar Sponge Iron Limited reported a Rs 10.74 crore loss for the quarter ended September 30, 2026, against a Rs 1.75 crore profit a year earlier, as net revenue from operations fell from Rs 63.76 crore to nil while its Chandil plant underwent revamping and major maintenance.

Why did BSIL report a Rs 10.74 crore Q2 loss?

BSIL reported total income of Rs 1.17 crore in the September 2026 quarter, entirely comprising other income, compared with Rs 71.01 crore in the quarter ended September 30, 2025. Total expenses were Rs 11.90 crore, resulting in a pre-tax and post-tax loss of Rs 10.74 crore because the company recorded no current or deferred tax expense.

The September-quarter result also reversed a Rs 2.48 crore profit in the June 2026 quarter. Other income declined from Rs 6.39 crore in June to Rs 1.17 crore in September, while total expenses increased from Rs 3.91 crore to Rs 11.90 crore; BSIL said Rs 6.11 crore of June-quarter other income related to liabilities and assets.

Employee-benefit expense rose to Rs 64.97 lakh from Rs 49.46 lakh a year earlier. Depreciation and amortisation decreased to Rs 77.23 lakh from Rs 1.01 crore, while power and fuel expense fell to Rs 53.17 lakh from Rs 2.22 crore during the nil-revenue quarter.

Why was BSIL's operating revenue nil in September 2026?

BSIL said it executed a Facility User Agreement with Amalgam Steel & Power Limited on March 23, 2026, while the plant was under revamping and major maintenance. The company consequently generated no revenue from operations in either the quarter or six months ended September 30, 2026.

The absence of operating revenue compares with Rs 141.26 crore in the six months ended September 30, 2025 and Rs 245.48 crore in the year ended March 31, 2026. The filing does not give a completion date for the revamping, or a date for resumption of commercial operations under the March 2026 agreement.

BSIL posted a Rs 8.26 crore loss after tax for the first half of the financial year, compared with a Rs 3.86 crore profit in the corresponding six months a year earlier. Total income fell to Rs 7.56 crore from Rs 154.80 crore, while total expenses decreased to Rs 15.81 crore from Rs 150.93 crore.

Which expenses weighed on BSIL's September-quarter result?

BSIL recorded Rs 9.98 crore of other expenses in the September 2026 quarter, compared with Rs 3.06 crore a year earlier and Rs 2.06 crore in the June 2026 quarter. This was the largest expense line and exceeded quarterly other income of Rs 1.17 crore by Rs 8.81 crore.

The company said the previous plant operator, Vanraj Steels Private Limited, abruptly abandoned the plant in February 2026. After regaining access, BSIL physically assessed inventory that had previously been reflected using information supplied by the operator and found substantial differences from the stock actually available.

BSIL accounted for inventory identified and sold during the current financial year at Rs 63.81 lakh. It wrote off stock not physically available under other expenses after assessing its availability, condition and recoverable value, although the available filing text does not disclose the amount written off.

The September-quarter expense base also included depreciation of Rs 77.23 lakh, power and fuel costs of Rs 53.17 lakh, and employee costs of Rs 64.97 lakh. BSIL reported no material-consumption cost, purchases, conversion or job-work charges, or finance costs for the quarter ended September 30, 2026.

What changed in BSIL's balance sheet and cash position?

BSIL's total assets were Rs 87.88 crore at September 30, 2026, down from Rs 92.27 crore at March 31, 2026. Property, plant and equipment declined to Rs 41.12 crore from Rs 42.44 crore, inventories fell to Rs 1.76 crore from Rs 4.02 crore, and trade receivables decreased to Rs 34.16 crore from Rs 35.67 crore.

Other equity widened to negative Rs 132.48 crore at September 30 from negative Rs 124.22 crore at March 31. With share capital unchanged at Rs 90.21 crore, shareholders' funds were negative Rs 42.27 crore, compared with negative Rs 34.02 crore at the previous year-end.

Cash and cash equivalents increased by Rs 18.73 lakh over the six months to Rs 85.72 lakh at September 30, 2026. The cash-flow statement records repayment of long-term or short-term borrowings of Rs 25.87 lakh in the half year, while non-current borrowings reduced by Rs 25.87 lakh from March 31.

What qualifications and liabilities did BSIL disclose?

BSIL's statutory auditor issued a qualified conclusion on the September 2026 results, including over the absence of a provision for a Rs 2.15 crore penalty recovered by South East Coalfields Limited for short lifting of coal under a Fuel Supply Agreement. Pending settlement, BSIL has included that amount in long-term loans and advances.

BSIL said its writ petition against South East Coalfields Limited's decision was dismissed by the High Court of Chhattisgarh on October 27, 2025, and it plans to file an appeal. The auditor also said it could not comment on whether balances related to dues management considers recoverable from, or contractually payable by, the plant operator require adjustment.

BSIL has approached promoter companies for a one-time settlement of their loans, but said the amount was neither quantified nor disclosed. Separately, it said the principal on the Government of Jharkhand soft loan had been fully paid following the June 9, 2022 High Court direction and that it has sought a waiver of interest.

Interest under the Jharkhand Industrial Rehabilitation Scheme 2003 was Rs 123.62 crore at September 30, 2026, according to BSIL. The company said it had provided Rs 27.46 crore in its books, only through August 10, 2013, and that the remaining interest is subject to its request for waiver of the entire amount.

Conclusion

BSIL's September-quarter loss reflected a nil-revenue period during plant revamping and major maintenance, with Rs 9.98 crore of other expenses outweighing Rs 1.17 crore of other income. The first-half comparison shows the extent of the change, from Rs 141.26 crore of operating revenue and a Rs 3.86 crore profit a year earlier to no operating revenue and a Rs 8.26 crore loss.

The next disclosed developments are progress on revamping and any revenue resumption under the March 23, 2026 Facility User Agreement. BSIL also plans an appeal over the Rs 2.15 crore South East Coalfields Limited penalty, while its interest-waiver request involving Rs 123.62 crore and its unquantified proposed settlement of promoter-company loans remain unresolved.