Kallam Textiles FY26 loss widens 83% amid CIRP stay

FY26 numbers signal a deeper stress phase

Kallam Textiles Limited reported a wider loss for FY26, with net loss after tax rising to ₹8,682.88 lakh. The company had posted a net loss of ₹4,736.96 lakh in FY25, making the FY26 loss higher by 83.30% year-on-year. Revenue from operations declined to ₹24,135.06 lakh in FY26 from ₹25,670.85 lakh in FY25, a drop of 5.98%. Total expenses increased to ₹33,240.30 lakh compared with ₹32,235.43 lakh in the previous year, up 3.12%. Loss before tax widened to ₹8,856.97 lakh from ₹7,182.66 lakh, an increase of 23.31%. The results arrive at a time when the company is dealing with insolvency proceedings and audit constraints.

Revenue slips while expenses rise

The FY26 topline contraction is visible in the operations revenue line, which fell by about ₹1,535.79 lakh year-on-year. At the same time, total expenses rose by about ₹1,004.87 lakh compared with FY25, adding pressure on profitability. The combination of lower revenue and higher cost base contributed to the larger loss for the year. The company did not attribute these annual movements to a single factor in the provided information, but it flagged operational challenges linked to the ongoing insolvency process in multiple exchange updates. These constraints also affected the company’s ability to meet reporting timelines, which later became a compliance issue.

CIRP triggered by NCLT order; board powers suspended

Kallam Textiles is undergoing a Corporate Insolvency Resolution Process (CIRP) following a National Company Law Tribunal (NCLT) order dated April 6, 2026. The insolvency petition was admitted under Section 7 of the Insolvency and Bankruptcy Code, 2016, based on a default of ₹21,049 lakh (₹210.49 crore) to Union Bank of India. With the start of CIRP, the powers of the Board of Directors were suspended. Management control shifted to an Interim Resolution Professional and related insolvency governance mechanisms, including a moratorium under Section 14 of the IBC. The company also informed the exchange that management transition, reconciliation requirements, and operational constraints under CIRP affected financial reporting timelines.

Resolution professional signed the financial results

Because of the CIRP framework and board suspension, the FY26 financial results were signed by the Resolution Professional, Mr. Chillale Rajesh. This is a notable governance marker for shareholders because the sign-off authority reflects who is in charge of the company’s affairs under insolvency proceedings. The company has also issued several CIRP-related disclosures, including updates on Committee of Creditors (CoC) meetings and public announcements required during the process.

Auditors issue disclaimer of opinion on FY26 statements

The statutory auditors, Brahmayya & Co., issued a disclaimer of opinion on the financial statements. The disclaimer cited insufficient audit evidence on key areas including deferred tax assets, impairment of assets, and creditor claims. A disclaimer of opinion is materially different from a qualified opinion because it indicates the auditors were unable to obtain enough evidence to form an audit view. In practical terms, it increases uncertainty around reported balances in the areas highlighted by the auditors. This also ties into the broader “going concern” uncertainty that the company flagged while CIRP and restructuring discussions continued.

NCLAT stay brings pause, not closure

The company disclosed that the National Company Law Appellate Tribunal (NCLAT) stayed further CIRP proceedings on June 18, 2026 to allow for a restructuring proposal, but the outcome remains undetermined. The NCLAT directed the Committee of Creditors to consider a comprehensive restructuring proposal within four weeks. Business operations were stated to continue during this period. While the stay provides breathing space for evaluation of alternatives, it does not by itself resolve the underlying issues around creditor claims, restructuring outcomes, or final governance arrangements.

Key financial snapshot (all figures in ₹ lakh)

Q3 FY26: loss per share deteriorates; quarterly loss remains high

For the third quarter of FY26, the company reported a loss per share of ₹3.75 versus a loss per share of ₹3.07 in Q3 FY25. It also reported Q3 FY26 revenue of ₹7,117.48 lakh, and a net loss of ₹1,978.55 lakh for the quarter ended December 31, 2025. Separately, the company’s quarterly disclosure data also described Q3 FY26 revenue as ₹7,174 lakh, up 13% from Q3 FY25, and net loss of ₹1,979 lakh, with the loss widened by 22% from Q3 FY25. These figures underline that profitability pressure remained significant even as revenue growth was reported for that quarter.

Compliance and reporting: delays, trading window closure, and BSE penalty

Kallam Textiles informed the exchange that it could not submit quarterly financial results on time due to CIRP-related challenges and sought extensions. It requested time until June 15, 2026 to submit financial results for the period ended March 31, 2026. The company has also applied to the Registrar of Companies (RoC), Vijayawada, seeking an extension to convene and hold its AGM for FY 2025-26, citing the ongoing CIRP. In another compliance development, the company was penalised ₹1.534 lakh by BSE for delaying audited financial results for Q2 FY27 and said it is seeking a waiver, attributing the delay to CIRP constraints. Separately, it closed its trading window from October 1, 2026 until 48 hours after declaring Q2 FY27 results, as per SEBI insider trading regulations.

CIRP process milestones disclosed by the company

The company’s disclosures also included steps within the CIRP process, such as meetings and invitations for resolution plans. It published Form G for expression of interest under CIRP on May 8, 2026, and invited expressions of interest for resolution plans with a deadline of May 23, 2026. The same disclosure set out a timeline extending until July 22, 2026 for submission of final resolution plans. It also scheduled its first Committee of Creditors meeting for May 2, 2026, and separately referenced CoC meeting updates and intimations dated April 28, 2026 and May 4, 2026.

Why this matters for shareholders and creditors

The combination of widening annual losses, auditor disclaimer of opinion, and ongoing insolvency proceedings raises several decision points for stakeholders. For shareholders, the board suspension and RP-led governance structure changes who controls day-to-day decisions and disclosures. For creditors, the CIRP framework and the CoC’s role become central, especially as the NCLAT asked the CoC to consider a comprehensive restructuring proposal within a set time frame. For the market, delayed filings, extensions sought under SEBI (LODR) constraints, and penalties signal operating and reporting friction while the company works through insolvency-related processes.

Conclusion: FY26 ends with larger losses and unresolved restructuring

FY26 closed with Kallam Textiles reporting a net loss of ₹8,682.88 lakh on revenue from operations of ₹24,135.06 lakh, while auditors issued a disclaimer due to insufficient audit evidence on key balances. The company remains in a CIRP environment initiated by the NCLT on April 6, 2026, even as the NCLAT stayed further proceedings on June 18, 2026 to allow consideration of a restructuring proposal. Near-term milestones already disclosed include CIRP timelines for resolution plans and regulatory steps such as the AGM extension request and the trading window closure linked to upcoming Q2 FY27 results.