financial results for half year and year ended march 2026
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Stellar Capital Services Limited reported a significant decline in performance for FY2026. Total income dropped to Rs. 57.07 Lakhs from Rs. 248.63 Lakhs in the previous year, while the company reported a loss before tax of Rs. 31.22 Lakhs compared to a profit of Rs. 6.37 Lakhs in FY2025. The auditors issued an unmodified (clean) opinion on the financial statements. However, a Key Audit Matter was raised regarding the company's loan impairment assessment — management did not fully apply the Expected Credit Loss model as required by Ind AS 109, including proper loan portfolio segmentation, forward-looking information, and staging criteria. The company has gross loan assets of Rs. 5,265.28 Lakhs with impairment provision of Rs. 832.68 Lakhs.
The company swung to a loss in FY2026 with revenue declining significantly. While the audit opinion is clean, the ECL methodology deviation raises concerns about the adequacy of loan loss provisions. Shareholders should monitor asset quality closely given this is a loan financing company.