Gokak Textiles power profit narrows first-half standalone loss

Gokak Textiles Limited reported a Rs 10.4988 crore power-segment profit before tax for the half year ended September 30, 2026, compared with a Rs 13.6307 crore loss a year earlier, narrowing its standalone pre-tax loss to Rs 3.2763 crore from Rs 26.0353 crore despite a wider textile loss.

How did Gokak Textiles’ segments perform in the first half?

Gokak Textiles’ power segment became profitable in the half year ended September 30, 2026, while the textile segment’s loss increased. Power reported profit before tax of Rs 10.4988 crore, reversing a Rs 13.6307 crore loss in the half year ended September 30, 2025. Textile reported a Rs 13.7751 crore pre-tax loss, compared with a Rs 12.4045 crore loss a year earlier.

The improvement in power was larger than the deterioration in textiles, although it did not produce a combined profit. Total standalone profit or loss before tax was a loss of Rs 3.2763 crore, against a loss of Rs 26.0353 crore in the prior-year first half. The segment table identifies the power result as including exceptional items.

Gokak Textiles recorded higher revenue in both operating segments. Textile revenue rose to Rs 25.4326 crore from Rs 22.5792 crore, while power revenue increased to Rs 25.8736 crore from Rs 12.4458 crore. After Rs 1.4607 crore of inter-segment revenue elimination, total segment revenue including exceptional items was Rs 49.8455 crore, up from Rs 33.9896 crore.

What changed in Gokak Textiles’ power business?

Gokak Textiles’ power business improved because reported revenue rose by Rs 13.4278 crore year on year and its segment result moved into profit. The Rs 10.4988 crore first-half profit before tax compared with a Rs 13.6307 crore loss in the corresponding period, while power revenue more than doubled to Rs 25.8736 crore.

The September quarter also showed a year-on-year improvement, but a sequential revenue decline illustrates the company’s stated seasonality. Power revenue was Rs 11.2252 crore in the quarter ended September 30, 2026, against Rs 5.3257 crore a year earlier and Rs 14.6485 crore in the June 2026 quarter. Quarterly power profit before tax was Rs 7.9708 crore, compared with a Rs 9.2671 crore loss in September 2025.

Gokak Textiles said power generation is largely weather-dependent and seasonal, meaning results for different quarters may not be directly comparable. The company also said fire and lightning incidents and equipment failures at its solar plant during the previous year had affected solar-power revenue relative to expected revenue.

The reported improvement included Rs 1.1060 crore of remaining insurance proceeds received in the June 2026 quarter as full and final settlement for damage and business-interruption losses linked to incidents between January and August 2025. Power depreciation and amortisation was Rs 7.5519 crore in the first half, almost unchanged from Rs 7.5490 crore a year earlier, while power capital expenditure was Rs 5.39 lakh against Rs 4.99 lakh.

Why did Gokak Textiles’ textile loss widen?

Gokak Textiles’ textile loss widened because the Rs 2.8534 crore increase in first-half revenue did not prevent a Rs 1.3706 crore increase in the reported pre-tax loss. Textile revenue reached Rs 25.4326 crore, but the segment loss grew to Rs 13.7751 crore from Rs 12.4045 crore in the prior-year half.

The company said its textile division has faced a business slowdown and financial difficulty in managing working-capital requirements and payments to creditors. In the quarter ended September 30, 2026, textile reported a Rs 7.2340 crore loss before tax, wider than the Rs 6.5411 crore loss in the June quarter and the Rs 5.3117 crore loss in the September 2025 quarter.

Quarterly textile revenue was Rs 12.5195 crore in September 2026, below Rs 12.9131 crore in June 2026 but above Rs 12.0560 crore a year earlier. Textile segment assets stood at Rs 130.7493 crore at September 30, 2026, down from Rs 139.4296 crore a year earlier, and segment liabilities declined to Rs 57.3711 crore from Rs 62.1937 crore.

Textile capital expenditure was Rs 6.55 lakh in the first half, versus Rs 1.05 lakh in the comparable period, while depreciation and amortisation fell to Rs 1.6797 crore from Rs 1.9006 crore. Gokak Textiles also said operations previously carried out at the Knitwear Unit would be undertaken from its Mills division after the unit’s closure.

What does the first-half result mean for Gokak Textiles’ financial position?

Gokak Textiles’ reduced standalone loss did not remove its negative equity or working-capital shortfall at September 30, 2026. Current liabilities of Rs 69.8986 crore exceeded current assets of Rs 28.3872 crore by Rs 41.5114 crore. Total equity was negative Rs 15.6724 crore, compared with negative Rs 24.3053 crore at March 31, 2026.

Accumulated losses were Rs 268.0537 crore and net worth was negative at September 30, 2026. The statutory auditor highlighted the half-year loss, excess current liabilities, accumulated losses, reduced textile operations and increased financial stress as conditions creating a material uncertainty that may cast significant doubt on Gokak Textiles’ ability to continue as a going concern. The auditor’s review conclusion was not modified.

Gokak Textiles received Rs 8.4092 crore in perpetual loans from Shapoorji Pallonji And Company Private Limited and its group companies during the first half. It also converted Rs 3.5000 crore of borrowings into perpetual loans, with both instruments classified as entirely equity in nature. Management said the group had demonstrated support previously and was committed to providing or arranging required financial and operational support.

Finance costs for the half year were reduced by a Rs 8.7043 crore reversal of charges previously levied by Indian Renewable Energy Development Agency Limited between February 2025 and August 2026. Gokak Textiles said the charges related to a shortfall in the required balance in the Debt Service Reserve Account, or DSRA, and were reversed after it received a waiver. The company remains in the process of meeting the remaining DSRA requirements.

Conclusion

Gokak Textiles’ first-half segment results show that the power business made a substantial year-on-year turnaround, with Rs 10.4988 crore of profit before tax replacing a Rs 13.6307 crore loss. That shift, alongside higher power revenue, reduced the standalone pre-tax loss to Rs 3.2763 crore. However, textiles remained loss-making, with its Rs 13.7751 crore loss exceeding power’s profit.

The next matters to watch are management’s stated expectation of improvement in the textile division, fulfilment of the remaining DSRA requirements and resolution of the employee dispute over the Knitwear Unit closure. The unit was deemed closed on October 6, 2026, and the company had agreed to sell it for Rs 19.5000 crore, against which it had received a Rs 9.5000 crore advance.