Rainbow Foundations Limited revenue doubles, profit declines

Rainbow Foundations Limited reported Rs 70.4984 crore of revenue from operations for the quarter ended September 30, 2026, up 102.7% year on year, while profit after tax declined sequentially to Rs 2.0154 crore from Rs 3.7531 crore as revenue fell from the June quarter and finance costs increased.

How much did Rainbow Foundations’ September-quarter revenue grow?

Rainbow Foundations’ revenue from operations more than doubled year on year to Rs 70.4984 crore in the quarter ended September 30, 2026, from Rs 34.7857 crore in the corresponding 2025 quarter. Revenue was lower than Rs 84.9601 crore in the preceding quarter ended June 30, 2026, a sequential decline of 17.0%.

The company reported one segment, Real Estate / Construction, because its chief operating decision maker reviews financial performance as a whole. All Rs 70.4984 crore of external-customer revenue in the September 2026 quarter was domestic Indian revenue, against Rs 34.7857 crore a year earlier, while overseas revenue was nil.

Total income, including other income, was Rs 70.6819 crore in the September quarter, compared with Rs 34.9671 crore a year earlier and Rs 85.4923 crore in June 2026. Other income was Rs 18.35 lakh, below Rs 53.22 lakh in the June quarter but close to Rs 18.14 lakh in the September 2025 quarter.

Why did Rainbow Foundations’ quarterly profit decline sequentially?

Rainbow Foundations’ profit after tax fell to Rs 2.0154 crore in September 2026 from Rs 3.7531 crore in June 2026, and profit before tax declined to Rs 2.7172 crore from Rs 4.9556 crore. The change coincided with a Rs 14.4617 crore sequential reduction in revenue from operations and finance costs rising to Rs 14.5728 crore from Rs 8.3274 crore.

Construction and development costs decreased to Rs 51.9840 crore from Rs 62.9261 crore between the two quarters, in line with the lower revenue base. Other expenses declined to Rs 53.59 lakh from Rs 7.5356 crore, but this did not offset the lower revenue and the Rs 6.2454 crore increase in finance costs.

September-quarter profit after tax remained 79.5% above the Rs 1.1225 crore reported a year earlier. Finance costs were Rs 14.5728 crore, compared with Rs 8.0540 crore in September 2025, while construction and development costs increased to Rs 51.9840 crore from Rs 22.7121 crore as revenue expanded.

Basic and diluted earnings per share, which were not annualised, were Rs 0.41 in the September 2026 quarter, compared with Rs 0.76 in June 2026 and Rs 0.23 a year earlier. Paid-up equity share capital was unchanged at Rs 49.6179 crore across all three quarterly reporting columns.

What did Rainbow Foundations report for the first half?

Rainbow Foundations reported first-half revenue from operations of Rs 155.4585 crore for the six months ended September 30, 2026, up 82.6% from Rs 85.1269 crore in the corresponding 2025 period. Profit after tax rose to Rs 5.7685 crore from Rs 2.6044 crore over the same comparison.

Construction and development costs for the half year rose to Rs 114.9101 crore from Rs 59.9304 crore, while finance costs increased to Rs 22.9002 crore from Rs 17.4722 crore. Profit before tax nonetheless increased to Rs 7.6728 crore from Rs 3.4127 crore as the increase in total income exceeded the rise in total expenses.

Half-year basic and diluted earnings per share were Rs 1.16, compared with Rs 0.52 in the prior-year half. Total income in the 2026 half year was Rs 156.1742 crore, including Rs 71.57 lakh of other income, compared with Rs 85.5307 crore and Rs 40.38 lakh, respectively, a year earlier.

How did Rainbow Foundations’ balance sheet and cash flow change?

Rainbow Foundations’ total assets were Rs 774.7366 crore at September 30, 2026, down from Rs 840.6682 crore at March 31, 2026. Inventories fell to Rs 685.8946 crore from Rs 747.1600 crore, while trade receivables decreased to Rs 27.4948 crore from Rs 43.6365 crore.

Total borrowings, comprising current and non-current borrowings, declined to Rs 521.9404 crore at September 30 from Rs 652.3581 crore at March 31. Current borrowings fell to Rs 437.5952 crore from Rs 512.2347 crore, while non-current borrowings decreased to Rs 84.3452 crore from Rs 140.1234 crore.

Net cash from operating activities was Rs 136.3145 crore in the half year ended September 30, 2026, compared with net cash used in operating activities of Rs 291.0318 crore in the prior-year half. The latest period included a Rs 61.4883 crore reduction in inventories and a Rs 41.2831 crore increase in trade payables, other financial liabilities and provisions.

Financing activities used Rs 137.8117 crore in the latest half year, against Rs 294.9925 crore generated in the prior-year period. Cash and cash equivalents consequently decreased by Rs 88.75 lakh to Rs 1.9263 crore at September 30, 2026, from Rs 2.8138 crore at the beginning of the period.

What disclosures affected Rainbow Foundations’ reported results?

Rainbow Foundations recorded exceptional items of Rs 42,000 for the September 2026 quarter and Rs 2.89 lakh for the half year, relating to the incremental impact of four new Labour Codes notified by the Government of India on November 21, 2025. The company measured the obligation under the Payment of Gratuity Act, 1972 formula, subject to a maximum of Rs 20 lakh per employee.

The company said it is establishing an approved gratuity trust fund with LIC and will monitor central and state rules and clarifications before recording accounting effects from applicable developments. The audit committee reviewed the standalone results and the board approved them on November 14, 2026, while statutory auditors carried out a limited review.

The auditors’ report covered the consolidated unaudited results of Rainbow Foundations and its subsidiary, Rainbow Foundations and Real Estates Private Limited. The subsidiary reported nil revenue, a Rs 0.01 lakh net loss for the September quarter, and total assets of Rs 0.96 lakh at September 30, 2026; the auditors said those results were not material to the group.

Conclusion

Rainbow Foundations delivered substantial year-on-year growth in September-quarter revenue, with operations revenue of Rs 70.4984 crore and profit after tax of Rs 2.0154 crore. The sequential result was different: revenue declined from Rs 84.9601 crore in June while finance costs rose from Rs 8.3274 crore, contributing to lower quarterly earnings despite reduced other expenses.

The disclosed matter to watch next is the establishment of the approved gratuity trust fund with LIC and any accounting impact from future Labour Code rules or clarifications. The company also reported Rs 22.9002 crore of finance costs and Rs 136.3145 crore of operating cash inflow in the first half, figures that will remain relevant in subsequent financial disclosures.