We herewith enclose the copy of unaudited financial statement as on 30.09.2025 along with the Limited Review Report given by the statutory auditors.
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Sri Nachammai Cotton Mills posted Q2 FY26 standalone net sales of Rs. 1,999.20 lakhs, up about 20% year-on-year from Rs. 1,662.44 lakhs, but reported an operating loss before tax of Rs. 185.37 lakhs (vs Rs. 69.26 lakh loss a year ago) and a loss after tax of Rs. 104.93 lakhs. For H1 FY26, the company swung to a profit after tax of Rs. 433.42 lakhs from a loss of Rs. 147.34 lakhs in H1 FY25, but this is entirely driven by a one-time exceptional gain of Rs. 6.58 crores arising from modification of promoter-held preference share terms (extension of maturity from April 2025 by 7 years). Underlying operations remain weak due to poor yarn demand and cotton-yarn price disparity, with only one unit running three shifts. On the positive side, power and fuel costs fell to Rs. 137.45 lakhs (from Rs. 180.09 lakhs YoY) thanks to a 4 MW solar power installation. However, net cash from operating activities for H1 FY26 was deeply negative at Rs. (926.01) lakhs. The statutory auditors (Gopalaiyer and Subramanian) issued an unmodified limited review report.
The headline profit is misleading — it is propped up by a one-time accounting gain from preference share modification, not from core yarn operations which continue to lose money. Negative operating cash flow and weak demand remain key concerns, though lower power costs from solar energy could support margins if demand recovers.