Rathi Bars reports Rs 27 crore first-half loss as sales stop

Rathi Bars Limited reported a Rs 27.00 crore net loss for the half year ended September 30, 2026, against a Rs 1.81 crore profit a year earlier, after revenue from operations fell to nil and provisions for bad and doubtful debts totalled Rs 21.91 crore.

Why did Rathi Bars report a first-half loss?

Rathi Bars reported a Rs 27.00 crore loss after tax for the half year ended September 30, 2026, compared with a Rs 1.81 crore profit after tax in the half year ended September 30, 2025. Loss before tax was also Rs 27.00 crore because the results carried no tax expense for the period. Total comprehensive loss was Rs 27.00 crore, while basic and diluted earnings per share were negative Rs 16.53, against positive Rs 1.11 a year earlier.

Operating income was absent during the six months. Revenue from operations was nil, compared with Rs 258.43 crore in the prior-year half, while total revenue was Rs 1.50 lakh, comprising other income, against Rs 259.19 crore a year earlier. Rathi Bars reported no exceptional or extraordinary items for either period, so the loss was recorded in the ordinary statement of profit and loss.

How much did bad-debt provisioning affect Rathi Bars?

Rathi Bars recognised Rs 21.91 crore of provisions for bad and doubtful debts across the June and September 2026 quarters, and included the charges in other expenses. The provision was Rs 11.94 crore in the quarter ended June 30, 2026 and Rs 9.97 crore in the quarter ended September 30, 2026. Other expenses in the six-month period consequently rose to Rs 22.08 crore from Rs 7.98 crore in the corresponding prior-year half.

The September-quarter loss was Rs 11.38 crore, including the Rs 9.97 crore provision, after a Rs 15.62 crore loss in the June quarter. The statutory auditor said the September-quarter provision represented 13.27% of disputed trade receivables and that the cumulative provision at September 30 represented about 34% of those receivables. The auditor said there was insufficient appropriate evidence to support the provision's basis and adequacy, so it could not determine whether further adjustments to receivables and reported results were needed.

What happened to Rathi Bars' operations and costs?

Rathi Bars' manufacturing operations remained suspended through the end of the September 2026 quarter, according to the auditor's limited-review report dated November 11, 2026. The board had noted, approved and ratified the temporary suspension at its April 10, 2026 meeting. The stated reasons included income-tax search proceedings initiated on December 15, 2025, Stage IV restrictions in the National Capital Region, a January 16, 2026 amendment to the consent to operate, and higher electricity tariffs.

Despite nil first-half operating revenue, Rathi Bars recorded Rs 1.91 crore of finance costs and Rs 2.04 crore of depreciation and amortisation expense. Finance costs declined from Rs 3.21 crore in the prior-year first half, while depreciation fell from Rs 2.61 crore. Employee-benefit expense decreased to Rs 7.56 lakh from Rs 2.66 crore, but those reductions did not offset Rs 22.08 crore of other expenses, including the receivables provision.

What changed in Rathi Bars' balance sheet and debt position?

Rathi Bars' total equity fell by Rs 27.00 crore to Rs 57.97 crore at September 30, 2026 from Rs 84.97 crore at March 31, 2026. Equity share capital was unchanged at Rs 16.33 crore, while other equity declined to Rs 41.64 crore from Rs 68.64 crore. The movement in other equity matched the Rs 27.00 crore first-half comprehensive loss reported in the results.

Total assets decreased by Rs 23.93 crore to Rs 230.12 crore at September 30 from Rs 254.05 crore at March 31. Trade receivables fell by Rs 21.91 crore to Rs 65.17 crore, inventories declined by Rs 79.98 lakh to Rs 1.39 crore, and loans and advances stood at Rs 123.87 crore. Cash and cash equivalents were unchanged at Rs 2.80 lakh, while current borrowings rose by Rs 1.93 crore to Rs 83.77 crore.

The auditor said cash-credit facilities of Rs 60.08 crore from Axis Bank and Rs 19.68 crore from Yes Bank had been classified as non-performing assets, or NPAs, in an earlier quarter and remained unpaid at September 30, 2026. It also said Rs 64.21 crore owed to Trade Receivables Discounting System, or TReDS, financiers remained unpaid and was under litigation. Separately, Rathi Bars disclosed Rs 85.77 crore of outstanding loans and revolving facilities, including Rs 1.70 crore in default as of the disclosure date.

What did the auditor say about Rathi Bars' ability to continue?

The auditor said the manufacturing suspension, unpaid facilities and the board's asset-monetisation proposal indicate material uncertainty that may cast significant doubt on Rathi Bars' ability to continue as a going concern. The board's plan is to monetise assets for repayment of bank dues, and the auditor said that proposal may significantly affect future operations. The limited-review report was issued on November 11, 2026 for the unaudited standalone results.

The auditor's conclusion was modified only for the possible effects of the matters described in its report. Subject to those observations, it said nothing else had come to its attention that caused it to believe the September 2026 financial statement had not been prepared, in all material respects, in line with applicable accounting standards and listing requirements. That conclusion does not resolve the auditor's uncertainty over whether the cumulative provision, about 34% of disputed receivables, is sufficient.

Conclusion

Rathi Bars moved from a Rs 1.81 crore first-half profit to a Rs 27.00 crore loss as manufacturing suspension left revenue from operations at nil and bad-debt provisions reached Rs 21.91 crore. The loss reduced total equity to Rs 57.97 crore, while current borrowings rose to Rs 83.77 crore and the auditor identified unpaid bank facilities and TReDS financier dues.

The next disclosed matter to watch is the board's proposed monetisation of assets to repay bank dues, which the auditor said may significantly affect operations. Further developments on restarting manufacturing, the Rs 64.21 crore TReDS litigation, repayment of Rs 79.76 crore of facilities identified as NPAs, and any additional receivables provision will determine how the position changes after September 30, 2026.