Supreme Infra Q3 Revenue Soars 314%, Debt Restructuring Drives 9-Month Profit

Introduction

Supreme Infrastructure India Limited announced a significant surge in revenue for the third quarter of fiscal year 2026, but continues to navigate operational losses amidst a complex debt restructuring process. In its unaudited financial results for the quarter and nine months ending December 31, 2025, the company revealed a 314.3% year-on-year increase in revenue from operations. However, this top-line growth was overshadowed by a net loss for the quarter. A starkly different picture emerged for the nine-month period, where the company reported a substantial profit, almost entirely attributable to exceptional gains from its approved Scheme of Arrangement with lenders.

Quarterly Financial Performance

For the third quarter of FY26, Supreme Infrastructure's revenue from operations jumped to ₹2,962.40 lakhs from ₹714.85 lakhs in the same period of the previous year. This represents a more than four-fold increase, signaling a potential revival in its core construction and infrastructure activities. Total income for the quarter followed a similar trajectory, rising to ₹2,981.76 lakhs. Despite this impressive revenue growth, the company could not achieve profitability, posting a net loss of ₹4,919.88 lakhs. While this loss is substantial, it marks an 86.4% reduction from the staggering ₹36,186.51 lakhs loss reported in Q3FY25, indicating some improvement in managing expenses or a lower impact from certain negative financial items compared to the prior year.

Nine-Month Turnaround Driven by Exceptional Items

The financial narrative for the nine months ended December 31, 2025, is dominated by the impact of debt restructuring. The company's revenue for this period grew by a modest 16.9% to ₹5,144.94 lakhs. The most significant figure was the net profit of ₹5,85,685.83 lakhs, a dramatic turnaround from a net loss of ₹1,05,353.58 lakhs in the corresponding period of the previous year. This profit was not a result of operational excellence but was fueled by an exceptional gain of ₹6,46,563.62 lakhs. This one-time gain underscores the company's reliance on its financial restructuring to repair its balance sheet.

Understanding the Debt Restructuring Gains

The exceptional gains are central to understanding Supreme Infrastructure's current financial state. These gains primarily stem from the partial implementation of a Scheme of Arrangement approved by its lenders. The largest component was a reversal of interest and principal payments amounting to ₹3,67,801.46 lakhs. An additional interest reversal of ₹2,78,805.87 lakhs for three lenders, pending their final No Dues Certificates, also contributed significantly. These accounting entries reflect the forgiveness of debt as part of the settlement plan, providing a massive, albeit non-operational, boost to the company's profit and loss statement.

Auditor's Modified Conclusion and Key Concerns

While the financial statements show signs of recovery, the company's independent auditors have issued a modified review conclusion, highlighting several material uncertainties and concerns that temper the positive news. These red flags point to significant underlying risks that investors should consider. A primary concern is the large volume of outstanding trade receivables, valued at ₹75,705.87 lakhs, which require a thorough assessment for expected credit losses. The recoverability of this amount remains a key uncertainty.

Furthermore, the auditors pointed to substantial investments in two erstwhile subsidiaries, SIBPL (₹142,556.84 lakhs) and SPITPL (₹15,677.22 lakhs), both of which are currently under the Corporate Insolvency Resolution Process (CIRP). The value of these investments is highly uncertain. The company also holds corporate guarantees totaling ₹1,53,315.69 lakhs for borrowings of its subsidiaries, creating a significant contingent liability. Finally, the auditors noted non-compliance with annual return filing requirements, indicating potential governance gaps.

Management's View on 'Going Concern' Status

Despite accumulated losses reaching ₹93,378.27 lakhs, Supreme Infrastructure's management maintains that the company remains a 'going concern.' This assessment is based on several factors. The primary justification is the partial implementation of the debt restructuring scheme, which has significantly reduced its debt burden. Management also points to future business continuity prospects and the exit of a majority of its financial creditors as positive indicators. They expect the pending settlements with the remaining lenders to be completed, further stabilizing the company's financial position. As of December 31, 2025, the company reported a positive net worth of ₹29,747.77 lakhs, largely due to the debt restructuring.

Future Outlook

Supreme Infrastructure India is at a critical juncture. The debt restructuring has provided a crucial financial lifeline, cleaning up its balance sheet and creating a path toward solvency. However, the auditors' concerns highlight persistent operational and financial risks. The company's future success will depend on its ability to translate its restructured balance sheet into sustainable operational profitability. Key challenges include recovering its substantial trade receivables, resolving the value of its investments in insolvent subsidiaries, and ensuring robust corporate governance. The focus for the company and its stakeholders will be on reviving its core business operations and generating consistent cash flows to support its long-term viability.