Starcom software asset remains Rs 24.31 crore, auditor modifies

Starcom Information Technology Limited carried Rs 24.31 crore of business-intelligence and data-quality software as intangible assets under development at September 30, 2026, unchanged from March 31, while its auditor issued a modified opinion on the matter. The balance represented about 92% of Starcom’s Rs 26.42 crore total assets.

Why did Starcom’s software asset receive a modified auditor opinion?

Starcom disclosed that the auditor issued a modified opinion on its Rs 24.31 crore software under development balance at September 30, 2026. The company said it has been developing software related to Business Intelligence and Data Quality Solutions “since long time”, while management believes that future economic benefits attributable to the asset will flow to Starcom.

The filing does not disclose a completion date, commercial deployment date, customer order, revenue forecast or quantified impairment for the software project as of September 30, 2026. The disclosed carrying value therefore rests on management’s expectation of future economic benefits, and the modified opinion identifies the matter as an auditor qualification in the unaudited results.

The balance was unchanged from Rs 24.31 crore at March 31, 2026, despite Rs 3 lakh spent on purchases of property, plant and equipment and intangible assets, including intangibles under development, in the six months ended September 30, 2026. Starcom’s separately reported intangible assets fell to Rs 4.70 lakh from Rs 25.71 lakh over the same period, whereas the development asset did not change.

How much of Starcom’s asset base is tied to software?

Starcom’s software under development accounted for about 97% of its Rs 25.03 crore non-current assets at September 30, 2026. Apart from the Rs 24.31 crore development balance, non-current assets included Rs 44.24 lakh of net income-tax assets, Rs 10.88 lakh of other non-current assets, Rs 6.17 lakh of other financial assets and Rs 6.07 lakh of property, plant and equipment.

The Data Quality, Statistical & Analytics Software segment reported Rs 24.73 crore of assets at September 30, 2026, down from Rs 25.06 crore at March 31, 2026. Its asset total was higher than the software-under-development balance because the segment measure includes other assets assigned to that business. The Test, Measurement & Embedded Solutions for Educational Sector segment held Rs 90.24 lakh of assets, while unallocated assets were Rs 79.16 lakh.

Total assets declined to Rs 26.42 crore at September 30 from Rs 27.56 crore at March 31, 2026. The reduction included trade receivables falling to Rs 88.23 lakh from Rs 1.95 crore, while current assets overall declined to Rs 1.39 crore from Rs 2.49 crore. The Rs 24.31 crore software-development balance remained unchanged across those two balance-sheet dates.

What revenue did Starcom’s software segment generate?

Starcom’s Data Quality, Statistical & Analytics Software segment generated Rs 7.79 lakh of revenue in the quarter ended September 30, 2026, compared with no revenue in the June 2026 quarter and Rs 17,000 in the September 2025 quarter. The segment reported a Rs 47,000 profit for the latest quarter, compared with a Rs 4.13 lakh loss in the immediately preceding quarter and a Rs 10,000 profit a year earlier.

For the half year ended September 30, 2026, the software segment recorded Rs 7.79 lakh of revenue and a Rs 3.66 lakh loss. In the corresponding half year ended September 30, 2025, revenue was Rs 2.26 lakh and segment profit was Rs 1.35 lakh. Revenue increased year on year, but the segment moved from a first-half profit to a loss.

The Test, Measurement & Embedded Solutions for Educational Sector segment remained Starcom’s larger reported revenue source, contributing Rs 41.78 lakh of the company’s Rs 49.57 lakh operating revenue in the September 2026 quarter. That segment reported a Rs 10.76 lakh loss, and the two segments together made a Rs 10.29 lakh loss before finance costs and unallocable expenses.

Starcom’s total loss before tax was Rs 1.58 crore for the quarter ended September 30, 2026, compared with a Rs 1.20 crore loss a year earlier. Finance costs were Rs 15.26 lakh and unallocable expenses net of income were Rs 1.33 crore in the latest quarter, compared with Rs 12.29 lakh and Rs 98.54 lakh respectively in the September 2025 quarter.

What other financial issues did Starcom report?

Starcom reported negative equity of Rs 33.51 crore at September 30, 2026, compared with negative equity of Rs 30.04 crore at March 31, 2026. Current liabilities were Rs 52.87 crore, while current assets were Rs 1.39 crore, and the company stated that its net worth was fully eroded and that it had incurred cash losses.

Management said it was pursuing prospective investors to meet working-capital requirements and held the view that operations would make profits in future. On that basis, Starcom prepared its financial statements on a going-concern basis. The September 2026 filing did not identify the prospective investors, state a proposed funding amount or provide a timetable for funding.

The company disclosed Rs 2.38 crore of overdue sales tax, service tax and goods and services tax dues, including Rs 1.76 crore of interest, at September 30, 2026. It also reported Rs 2.07 crore of provident fund, Employees’ State Insurance Corporation and professional-tax dues, including Rs 1.40 crore interest, and Rs 12.04 crore of tax deducted at source dues, including Rs 7.31 crore interest. Starcom said it had provided interest through September 30, but had not ascertained other consequential legal impacts.

A separate modified-opinion matter involved Rs 10 crore received from a city builder as compensation for vacating premises that had previously been leased for 40 years. Starcom recorded the amount as an other current liability because it said relevant documentation was unavailable to determine the transaction’s nature. The company also reported Rs 6.61 crore of rent outstanding through March 31, 2019, net of tax deducted at source, and said it was discussing a waiver or reduction with the lessors.

Conclusion

Starcom’s September 2026 results place the principal asset-valuation issue in its Rs 24.31 crore software development balance, which has remained unchanged over six months and comprises about 92% of total assets. The related software segment generated Rs 7.79 lakh of quarterly revenue, while Starcom recorded a Rs 1.58 crore quarterly loss and negative equity of Rs 33.51 crore.

The next disclosures to watch are evidence of completion, commercial use or future economic benefits from the business-intelligence and data-quality software, and whether the modified auditor opinion changes. Starcom’s stated plan to pursue prospective investors for working capital, together with the unresolved rent discussions and classification of the Rs 10 crore compensation receipt, remain additional matters for subsequent filings.