Outcome of Board Meeting is enclosed
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Kovalam Investment & Trading Company Ltd, a BSE-listed NBFC, announced its unaudited Q2 FY26 and H1 FY26 results (ended September 30, 2025) at a board meeting held on November 12, 2025. Profit after tax for H1 FY26 grew roughly 42% year-on-year to about Rs. 281.77 lakhs (vs Rs. 198.04 lakhs in H1 FY25), with basic EPS of Rs. 11.56 for the half year. However, the headline growth is largely driven by fair value gains on investments rather than core interest/dividend income. The company also disclosed a related-party transaction in Note 7: it sold investments originally bought for Rs. 45 lakhs to a related party for just Rs. 21.92 lakhs – effectively a Rs. 23 lakh loss on a related-party deal. Cash flow from operations was negative at Rs. (25.61) lakhs for H1 FY26 and Rs. (94.94) lakhs for FY25, signalling that reported profits are not translating into operating cash. Total assets stood at Rs. 9,084 lakhs, of which investments of Rs. 8,366 lakhs dominate the balance sheet.
Reported profit growth looks strong on the surface, but it is propped up by mark-to-market gains on a concentrated investment book, while operating cash flow stays negative and a related-party sale was struck at a significant loss – a mixed signal for shareholders.