The Board of Directirs in their meeting held on today interalai considered and approved Audited Financial Results for Quarter and Year ended 31st March 2026
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Rainbow Denim Ltd reported strong financial performance for FY26. Revenue from operations grew 64.7% to Rs 27,054.15 Lacs from Rs 16,431.47 Lacs in FY25. Net profit increased 67.9% to Rs 2,342.32 Lacs from Rs 1,395.23 Lacs, with EPS rising to Rs 17.63 from Rs 10.50. However, the company reported negative operating cash flow of Rs 2,161.20 Lacs, a deterioration from Rs 1,785.52 Lacs in the prior year. Total borrowings nearly doubled to Rs 2,050.29 Lacs, while cash and cash equivalents dropped sharply to Rs 7.92 Lacs from Rs 308.96 Lacs. The statutory auditor issued an unqualified opinion but included an Emphasis of Matter noting that books of accounts from the previous management's liquidator have not been received since takeover in September 2023.
Strong profit growth is positive for shareholders, but the significant negative operating cash flow and sharply increased debt levels raise concerns about financial stability. The auditor's emphasis on unresolved books from previous management adds uncertainty.