Outcome of Board Meeting held on 12th November, 2025.
Awaiting price reaction for this filing.
Modern Denim Limited's board, on November 12, 2025, approved the unaudited financial results for Q2 FY26 (quarter ended Sept 30, 2025) and H1 FY26. Revenue from operations for the quarter rose to Rs. 579.97 lacs from Rs. 388.85 lacs in Q2 FY25 (roughly 49% YoY growth). However, the loss before tax widened sharply to Rs. 312.08 lacs (vs Rs. 133.06 lacs last year), and H1 FY26 loss stood at Rs. 492.52 lacs versus Rs. 247.80 lacs in H1 FY25. The statutory auditor (J.T. Shah & Co.) issued a Qualified Opinion, flagging non-provision of interest on preference shares and borrowings (pending BIFR waiver), and highlighted a Material Uncertainty on Going Concern because the company's networth is fully eroded to a negative Rs. 7,131.73 lacs, with a Scheme of Compromise and Amalgamation u/s 230-232 still awaiting approval. An Exceptional Item of Rs. 155.31 lacs in H1 related to vendor compensation was also noted (with an Emphasis of Matter on a vendor compensation dispute). Operating cash flows remained deeply negative at Rs. (441.05) lacs in H1 FY26.
Despite top-line growth, the company is in deep financial distress — fully eroded networth, widening losses, qualified audit opinion, and an explicit going-concern warning tied to a pending BIFR scheme. For shareholders, this is a high-risk situation where stock price recovery hinges on the approval of the compromise/merger scheme; until then, earnings quality and solvency remain major concerns.