Narendra Properties Limited invests Rs 7.50 crore in two LLPs

Narendra Properties Limited invested Rs 7.50 crore in two developer Limited Liability Partnerships during the half year ended September 30, 2026, gaining a 35% profit-sharing ratio in each from August 5, 2026. The investments were classified as associates because Narendra Properties said its LLP agreements provide significant influence.

How much did Narendra Properties invest in the LLPs?

Narendra Properties invested Rs 7.50 crore in aggregate, contributing Rs 3.75 crore each to Sugal Earthen Spaces Developers LLP and Solidus Developers LLP. Both capital contributions were concluded during the quarter and half year ended September 30, 2026, with the interests effective from August 5, 2026.

The Rs 7.50 crore outlay was recorded as an investing cash outflow in the standalone cash-flow statement for the half year ended September 30, 2026. The corresponding half year ended September 30, 2025 showed no investment in LLP capital contributions, so the deployment was new in the reported period.

The balance sheet recorded non-current investments of Rs 7.50 crore at September 30, 2026, compared with nil at March 31, 2026. This balance corresponds with the total LLP capital contribution disclosed in the half-year cash-flow statement.

What interest does Narendra Properties hold in each LLP?

Narendra Properties holds a 35% profit-sharing ratio in each LLP under the respective partnership agreements. The filing identifies Sugal Earthen Spaces Developers LLP and Solidus Developers LLP as associates from their effective date of August 5, 2026.

Narendra Properties said the agreements give it significant influence over both entities, which supports associate treatment under Indian Accounting Standards rather than subsidiary treatment. The announcement does not disclose the LLPs’ other partners, assets, liabilities, projects, revenue or profit after the August 5, 2026 effective date.

The company said it operates primarily in construction and property development and has no separate reportable segments. The filing therefore places the two associates within a group whose stated operating activity is property development, but does not set out a project-specific plan for either LLP.

How will Narendra Properties account for the stakes?

Narendra Properties will account for the Rs 7.50 crore investments at cost in its standalone financial results under Indian Accounting Standard 27, Separate Financial Statements. At September 30, 2026, the investments were classified as non-current financial assets in the standalone balance sheet.

Narendra Properties said it will use the equity method for the associates in consolidated financial results under Indian Accounting Standard 28, Investments in Associates and Joint Ventures. The company stated that this treatment applies from the respective effective dates, both of which were August 5, 2026.

The accounting distinction means the standalone statement records the initial amount as an investment, while consolidated results will apply the equity method. The September 30, 2026 filing contains standalone unaudited results and does not report the LLPs’ income, profit or loss.

Why did the auditor draw attention to the investments?

The statutory auditor highlighted the two initial LLP investments in an emphasis-of-matter paragraph dated November 5, 2026. The auditor named both LLPs and said they qualify as associates under Indian Accounting Standard 28.

The emphasis-of-matter paragraph did not modify the auditor’s review conclusion on the quarter and six months ended September 30, 2026. The auditor said nothing had come to its attention to indicate a material misstatement, while noting that its review provides moderate assurance and is not an audit.

Narendra Properties’ audit committee reviewed the results and the board approved them at its November 5, 2026 meeting. The company said the statutory auditors performed a limited review of the standalone figures for the September 2026 quarter and half year.

How did the investment affect assets and cash flows?

Narendra Properties’ non-current assets increased to Rs 13.8345 crore at September 30, 2026 from Rs 7.4966 crore at March 31, 2026. The rise included non-current investments of Rs 7.50 crore, which had been nil six months earlier.

Total assets rose to Rs 40.1989 crore from Rs 39.0753 crore over the same period, while current assets declined to Rs 26.3644 crore from Rs 31.5787 crore. Cash and cash equivalents fell to Rs 8.33 lakh at September 30, 2026 from Rs 1.0633 crore at March 31, 2026.

Net cash used in investing activities was Rs 2.7633 crore in the half year ended September 30, 2026, compared with net cash generated from investing activities of Rs 4.5285 crore a year earlier. The latest period included the Rs 7.50 crore LLP contribution, partly offset by Rs 2.4308 crore generated from loans given and repaid and Rs 1.1266 crore from changes in fixed deposits.

How did Narendra Properties’ profit compare with last year?

Narendra Properties reported net profit after tax of Rs 1.1575 crore for the six months ended September 30, 2026, compared with Rs 1.1747 crore in the corresponding prior-year period. Basic and diluted earnings per share were Rs 1.63, compared with Rs 1.65, and the company said the half-year measure was not annualised.

Total income from operations fell to Rs 1.9620 crore from Rs 4.3081 crore because revenue from operations was nil in the latest half year, against Rs 2.7520 crore a year earlier. Other income increased to Rs 1.9620 crore from Rs 1.5560 crore, while total expenses declined to Rs 80.58 lakh from Rs 3.1386 crore.

For the quarter ended September 30, 2026, net profit after tax was Rs 27.27 lakh, down from Rs 40.26 lakh in the quarter ended September 30, 2025. Quarterly total income was Rs 72.25 lakh versus Rs 75.23 lakh, and revenue from operations was nil in both quarters.

Conclusion

The Rs 7.50 crore investment established two associate relationships for Narendra Properties, each carrying a 35% profit-sharing ratio from August 5, 2026. The standalone balance sheet reflects the full amount as non-current investments, while the auditor specifically drew attention to the associate classification without modifying its November 5, 2026 review conclusion.

The next area to watch is the application of the equity method in Narendra Properties’ consolidated financial results, which the company said will apply from the LLPs’ effective dates. The September 30, 2026 filing does not disclose either LLP’s projects, operating performance, other partners or a timetable for further capital deployment.