Sri Chakra Cement Limited faces negative equity and shutdown

Sri Chakra Cement Limited reported current liabilities of Rs 93.6364 crore against current assets of Rs 19.5581 crore at September 30, 2026, while its Karampudi manufacturing unit remained disclosed as temporarily suspended from June 27 because of working-capital constraints. Total equity was negative Rs 39.0889 crore, and an operational creditor had sought Rs 2.91 crore under the Insolvency and Bankruptcy Code.

Why was Sri Chakra Cement’s Karampudi unit suspended?

Sri Chakra Cement said its Karampudi manufacturing operations were temporarily suspended with effect from June 27, 2026, because of working-capital constraints. The company repeated this disclosure in the notes to the standalone results for the quarter and half-year ended September 30, 2026, which the Board approved on November 12, 2026.

The filing does not give a date for resuming production, a production-volume estimate, lost-sales figure or funding plan for Karampudi. It identifies cement as the company’s only primary segment, meaning the suspension concerns its sole reported operating segment rather than one separately disclosed line among several businesses.

How did Sri Chakra Cement’s liquidity position change?

Sri Chakra Cement’s current-liability gap widened to Rs 74.0783 crore at September 30, 2026, from Rs 69.3913 crore at March 31, 2026. Current assets fell by Rs 5.8822 crore over the six-month period, exceeding the Rs 1.1952 crore reduction in current liabilities.

Cash and cash equivalents declined to Rs 3.78 lakh at September 30 from Rs 1.0482 crore at March 31, while inventory declined by Rs 4.8561 crore to Rs 12.3093 crore. Trade receivables moved in the other direction, increasing to Rs 2.1648 crore from Rs 1.4888 crore over the same six months.

Current liabilities included Rs 62.8914 crore due to creditors other than micro and small enterprises at September 30, up from Rs 59.7558 crore at March 31. Current borrowings were unchanged at Rs 1.1376 crore, while other current liabilities fell to Rs 11.3407 crore from Rs 15.8044 crore.

Why did Sri Chakra Cement’s net worth become more negative?

Sri Chakra Cement reported total equity of negative Rs 39.0889 crore at September 30, 2026, compared with negative Rs 33.7133 crore at March 31. Equity share capital was unchanged at Rs 9 crore, while other equity deteriorated to negative Rs 48.0889 crore from negative Rs 42.7133 crore.

Total assets declined by Rs 10.4488 crore to Rs 122.6047 crore during the six months, while total liabilities decreased by Rs 5.0732 crore to Rs 161.6936 crore. The difference between those two reported balances corresponds with the negative total equity shown in the September balance sheet.

Non-current liabilities stood at Rs 68.0572 crore at September 30, down from Rs 71.9352 crore at March 31. The balance included non-current borrowings of Rs 53.3762 crore, other financial liabilities of Rs 5.629 crore and other non-current liabilities of Rs 7.096 crore; the filing does not provide their repayment terms or maturity schedule.

The statutory auditor specifically drew attention to the negative net worth and the excess of current liabilities over current assets in its November 12 limited-review report. The auditor said its conclusion was not modified in respect of those matters, which means the report highlighted them without changing its review conclusion on the results.

What is the IBC demand against Sri Chakra Cement?

Sri Chakra Cement received a demand notice on August 1, 2026, under the Insolvency and Bankruptcy Code, 2016, from an operational creditor in respect of unpaid dues of Rs 2.91 crore. The company said it had informed the stock exchange, and the notice was repeated in both the standalone and consolidated auditor review reports.

The filing does not name the operational creditor or state whether the amount was paid, disputed, settled or followed by an insolvency application. The disclosed claim equals about 3.1% of current liabilities of Rs 93.6364 crore at September 30, calculated from the reported balance-sheet figures.

The office of chief financial officer was vacated effective May 30, 2026. Sri Chakra Cement appointed Managing Director K Vijay Kumar as chief financial officer in additional charge from August 14, 2026, according to the standalone-results note.

The company does not disclose a date for appointing a separate chief financial officer or a further update on the additional-charge arrangement. The management change occurred before the August 1 demand notice and during the period in which the Karampudi unit was suspended from June 27.

What did the auditor say about Sri Chakra Cement’s results?

Sri Chakra Cement’s statutory auditor, C Ramachandram & Co., performed a limited review of the unaudited standalone results for the quarter and half-year ended September 30, 2026. In its report dated November 12, the auditor said nothing had come to its attention indicating that required disclosures were missing or that the results contained a material misstatement.

The review was conducted under Standard on Review Engagements 2410, which the report says provides moderate assurance and is not an audit. The auditor drew attention to the Karampudi suspension, negative net worth, liquidity mismatch, chief financial officer vacancy and Rs 2.91 crore creditor demand without modifying its conclusion.

Sri Chakra Cement’s consolidated review includes Sri Subramanya Solar Power Projects LLP as an associate. The auditor said the group’s share of the associate’s total profit after tax was Rs 19.41 lakh for the quarter ended September 30, 2026.

That associate’s financial information had not been reviewed and was based solely on management-certified information, according to the consolidated review report. The consolidated report separately repeated the June 27 suspension and August 1 operational-creditor demand, but gave no update on either a restart date or the demand’s outcome.

Conclusion

Sri Chakra Cement’s September 2026 filing links an operating suspension to a balance sheet with negative equity of Rs 39.0889 crore and a Rs 74.0783 crore gap between current liabilities and current assets. The Rs 2.91 crore IBC demand notice adds a specific creditor-related matter to the company’s disclosed working-capital constraints.

The next disclosed matters to watch are whether Karampudi resumes operations, whether the company sets out a working-capital plan, and the status of the operational-creditor demand. Subsequent filings may also show whether the additional chief financial officer arrangement, effective August 14, 2026, is replaced and how the current-liability gap changes after September 30.