Submission of outcome of the Meeting of Board of Directors held on 14th August, 2025
MODTHREAD · price
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Modern Threads (India) Limited's Board approved unaudited Q1 FY26 results on 14 August 2025. Revenue from operations rose to Rs 6,986.41 lakhs, up about 20.3% from Rs 5,805.24 lakhs in Q1 FY25. Net profit was a marginal Rs 0.63 lakhs (EPS Rs 0.0018) compared with a loss of Rs 6.78 lakhs in the year-ago quarter. The statutory auditor issued a 'Qualified Conclusion', flagging that the company has not provided for cumulative interest/dividend on redeemable preference shares of Rs 1,056.75 lakhs and that trade payables and receivable balances are subject to confirmation. Management also disclosed that deferred tax assets of Rs 172.37 lakhs were not recognised because future taxable profits are not expected to be available. A wholly-owned UK subsidiary, Modern Woollens UK Ltd, was set up in November 2024 but is yet to start operations.
Top-line growth is healthy, but profitability is wafer-thin and the multiple audit qualifications highlight weak financial reporting and a large unprovided preference-share dividend overhang. Shareholders should watch for progress on settling the cumulative preference share liability and any meaningful improvement in margins before taking a constructive view.