IVRCL Q2 Loss Hits ₹90,261 Cr Amid Auditor Disclaimers

Introduction

IVRCL Limited, an infrastructure company currently undergoing liquidation, has reported a significant widening of its net loss to ₹90,260.62 crore for the second quarter of the financial year 2025-26. This marks a substantial increase from the ₹74,284.46 crore loss recorded in the same period last year. The grim financial results are compounded by a disclaimer of opinion from its statutory auditors, who have highlighted critical uncertainties regarding the company's assets and its ability to continue as a going concern, despite a directive from the National Company Law Tribunal (NCLT).

Financial Performance Breakdown

The company's financial health shows a steep decline across key metrics. Revenue from operations for Q2 FY26 plummeted to ₹152.87 crore, a sharp fall from ₹677.77 crore in Q2 FY25. Total income for the quarter also dropped drastically to ₹357.64 crore compared to ₹2,847.89 crore year-on-year. For the first six months of FY26, the cumulative net loss reached ₹1,75,458.90 crore, significantly higher than the ₹1,46,638.96 crore loss during the corresponding period in the previous fiscal year. This performance underscores the severe operational and financial challenges facing the company.

Auditor's Disclaimer Raises Red Flags

The statutory auditors, in their review report, issued a disclaimer of opinion, indicating they were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. This is a serious concern that questions the reliability of the financial statements. The auditors pointed to several material issues:

• Deferred Tax Assets: The recognition of ₹95,705.88 crore in deferred tax assets is questionable, as there is no convincing evidence of future taxable income against which these assets could be realized.
• Disputed Receivables: A massive sum of ₹1,58,525.96 crore in trade receivables and deposits is currently under various disputes and arbitration, making their recovery highly uncertain.
• Investment Valuation: Investments in subsidiaries and joint ventures, valued at ₹1,83,040.68 crore, are at risk due to the significant accumulated losses of these entities.
• Outstanding Advances: Loans and advances to subsidiary companies amounting to ₹80,887.12 crore have been outstanding for extended periods, casting doubt on their recoverability.

These factors collectively create a cloud of uncertainty over the company's financial position, making it difficult to assess its true value and liabilities.

Key Financial Metrics (Q2 & H1 FY26)

The Liquidation Process and Leadership Change

IVRCL has been under a liquidation process as a 'going concern' since an NCLT order on July 26, 2019. This unique status allows the company to continue its operations while the liquidator attempts to sell it as a whole. The liquidation period has been extended until December 16, 2025. In a significant development, the NCLT Hyderabad Bench approved a change in leadership on October 29, 2025. Mr. Purusottam Behera has been appointed as the new liquidator, replacing Mr. Sutanu Sinha. As the liquidator, Mr. Behera now holds all the powers of the Board of Directors and Key Managerial Personnel, and he authorized the release of the latest financial results.

Corporate Governance and AGM Resolutions

Despite being under liquidation, the company recently conducted its Annual General Meeting (AGM). Key resolutions passed included the approval of the audited financial statements for the year ended March 31, 2025. The members also ratified the remuneration for the Cost Auditor and approved the appointment of auditors for the company's branch offices. The voting process was managed by M/s. D. Hanumanta Raju & Co., who acted as the Scrutinizer, and all resolutions were declared approved.

Market Impact and Future Outlook

The continued massive losses and the auditors' inability to form an opinion on the financial statements paint a bleak picture for IVRCL's stakeholders. The 'going concern' status by NCLT order provides a slim hope for the company's revival through a potential sale, but the underlying financial issues are profound. The success of the liquidation process under the new liquidator will be critical in determining any potential recovery for creditors and shareholders. The company's ability to realize its disputed assets and manage its enormous liabilities remains the central challenge.

Conclusion

IVRCL's Q2 FY26 results highlight a company in deep financial distress, with widening losses and fundamental questions about the validity of its balance sheet. The disclaimer from the auditors serves as a major warning to all stakeholders. The path forward depends entirely on the outcome of the ongoing liquidation process, which is now extended and under new leadership. The focus will be on the new liquidator's strategy to navigate the complex web of disputed assets, liabilities, and legal proceedings to find a resolution for the beleaguered infrastructure firm.