Bihar Sponge Iron reports Rs 10.74 crore September loss

Bihar Sponge Iron Limited reported no revenue from operations and a Rs 10.74 crore net loss for the quarter ended September 30, 2026, compared with Rs 63.76 crore of operating revenue and a Rs 1.75 crore profit a year earlier. Bihar Sponge Iron said its plant was under revamping and major maintenance following a March 2026 facility agreement.

Why did Bihar Sponge Iron report no operating revenue?

Bihar Sponge Iron reported no sales, goods and services tax (GST), or net revenue from operations in the September 2026 quarter because its plant was under revamping and major maintenance. Bihar Sponge Iron said it executed a Facility User Agreement with Amalgam Steel & Power Limited on March 23, 2026, and consequently generated no operating revenue during the quarter and half year ended September 30, 2026.

The change from the prior year was substantial. In the September 2025 quarter, Bihar Sponge Iron recorded sales of Rs 73.17 crore, GST of Rs 3.41 crore and net operating revenue of Rs 63.76 crore. For the six months ended September 30, 2025, net operating revenue was Rs 141.26 crore, while the corresponding September 2026 half-year figure was nil.

Other income was Rs 1.17 crore in the latest quarter, down from Rs 7.23 crore a year earlier, leaving total income at Rs 1.17 crore. In the June 2026 quarter, Bihar Sponge Iron had no operating revenue and reported Rs 6.39 crore of other income, compared with Rs 1.17 crore in the September quarter.

What caused Bihar Sponge Iron's September-quarter loss?

Bihar Sponge Iron's Rs 10.74 crore loss resulted from Rs 11.90 crore of total expenses exceeding total income of Rs 1.17 crore, with no revenue from operations to absorb those costs. This reversed a Rs 1.75 crore profit after tax in the September 2025 quarter, when total income was Rs 71.01 crore and expenses were Rs 69.26 crore.

Other expenses rose to Rs 9.98 crore in the September 2026 quarter from Rs 3.06 crore in the prior-year quarter. Employee-benefit expense was Rs 64.97 lakh, depreciation and amortisation expense was Rs 77.23 lakh, and power and fuel expense was Rs 53.17 lakh during the quarter without recorded sales.

Bihar Sponge Iron said it regained access to its plant in February 2026 after the earlier operator, Vanraj Steels Private Limited, abandoned the premises. Following a physical assessment, Bihar Sponge Iron accounted for inventory identified and sold during the current financial year at Rs 63.81 lakh, while inventory not physically available was written off under other expenses.

For the six months ended September 30, 2026, Bihar Sponge Iron reported a Rs 8.26 crore loss after tax, compared with a Rs 3.86 crore profit in the comparable 2025 half year. The September-quarter loss followed a Rs 2.48 crore profit after tax in the June 2026 quarter, although operating revenue was nil in both 2026 quarters.

How did Bihar Sponge Iron's financial position change?

Bihar Sponge Iron's shareholders' funds were negative Rs 42.27 crore at September 30, 2026, compared with negative Rs 34.02 crore at March 31, 2026. The movement followed a Rs 8.25 crore comprehensive loss for the six months, while paid-up equity share capital was unchanged at Rs 90.21 crore.

Other equity was negative Rs 132.48 crore at September 30, compared with negative Rs 124.22 crore at March 31. Total assets declined to Rs 87.88 crore from Rs 92.27 crore, as inventories fell to Rs 1.76 crore from Rs 4.02 crore and trade receivables declined to Rs 34.16 crore from Rs 35.67 crore.

Cash and cash equivalents increased to Rs 85.72 lakh at September 30, 2026, from Rs 66.99 lakh at March 31. Non-current borrowings declined by Rs 25.87 lakh to Rs 83.98 crore, while trade payables increased by Rs 2.04 crore to Rs 8.79 crore over the same six-month period.

What issues did Bihar Sponge Iron's auditor qualify?

Bihar Sponge Iron's statutory auditor issued a qualified conclusion on the September 2026 results, citing an unprovided coal penalty of Rs 2.15 crore, an unquantified proposed settlement of promoter-company loans, and uncertainty over recoverability of claims involving the plant operator. The auditor said that, except for the possible effects of these matters, its review found no indication that the results failed applicable disclosure requirements.

The Rs 2.15 crore penalty was recovered by South East Coalfields Limited for short lifting of coal under a fuel supply agreement. Bihar Sponge Iron said its writ petition against the South East Coalfields decision was dismissed on October 27, 2025, and that it plans to file an appeal before the High Court; pending final settlement, the amount remains included in long-term loans and advances.

Bihar Sponge Iron has approached its promoters for a one-time settlement of loans from promoter companies, but said the amount was neither quantified nor disclosed. Separately, interest on the Government of Jharkhand soft loan was Rs 123.62 crore at September 30, 2026, of which Rs 27.46 crore had been provided in the books pending consideration of Bihar Sponge Iron's request for waiver.

The auditor also said it could not comment on whether adjustments were needed to balances related to the plant operator. Bihar Sponge Iron's management represented that claims and dues are recoverable under contractual obligations and said it did not foresee impairment or a provision, while legal remedies are being pursued.

Conclusion

Bihar Sponge Iron's September 2026 result reflects a halt in operating sales during plant revamping, with Rs 11.90 crore of expenses producing a Rs 10.74 crore quarterly loss. The comparison with the Rs 1.75 crore profit a year earlier reflects the loss of Rs 63.76 crore of operating revenue and higher other expenses that included the inventory accounting adjustment.

Next, Bihar Sponge Iron's disclosed matters to watch include the revamping and major maintenance of the plant under the March 23, 2026 agreement, the board's plan to install and maintain a waste-heat recovery plant under pollution-control consent conditions, and the planned appeal over the Rs 2.15 crore coal penalty. Bihar Sponge Iron has not disclosed a date for resumed operating revenue or a quantified settlement of promoter-company loans.