Akshar Spintex Limited turned profitable in Q1FY26, reporting a net profit from continuing operations of ₹59.80 lakh compared to a net loss of ₹123.65 lakh in Q1FY25. The Gujarat-based spinning mill achieved this turnaround amid a 14.3% year-on-year rise in total income to ₹3,050.62 lakh, signaling early signs of recovery in its core cotton yarn segment.

The Board of Directors approved the unaudited financial results on August 7, 2026, following review by the Audit Committee. The statutory auditors conducted a limited review of the accounts, which were prepared in accordance with Ind AS 34 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance

Total income for the quarter stood at ₹3,050.62 lakh, up from ₹2,668.90 lakh in Q1FY25. Total expenses decreased slightly to ₹2,946.51 lakh from ₹2,841.96 lakh in the prior year quarter, resulting in a pre-tax profit before exceptional items of ₹104.12 lakh, compared to a loss of ₹173.06 lakh previously.

The company recorded a deferred tax credit of ₹44.32 lakh in the current quarter, whereas it had incurred a deferred tax expense of ₹49.41 lakh in Q1FY25. No current tax or MAT credit was availed during the period. Earnings per share (basic) improved to ₹0.01 from a loss of ₹0.02 per share in the previous year’s corresponding quarter.

Operational Context

Akshar Spintex operates in a single segment: spinning of cotton yarn. Consequently, separate segment reporting is not applicable under Ind AS 108. The company continues to monitor the implementation of the New Labour Codes, which consolidated 29 existing legislations into four codes effective from November 21, 2025. Management stated it will provide appropriate accounting effects based on finalizations of Central/State rules and government clarifications.

What the Numbers Show

The shift from loss to profit is primarily attributable to the reversal in deferred tax impact rather than a drastic change in operational margins. While income grew by nearly ₹382 lakh, expenses also rose, keeping the operating margin thin. The ₹93.73 lakh swing in tax provisions (from an expense of ₹49.41 lakh to a credit of ₹44.32 lakh) was the decisive factor in converting the bottom line. Investors should watch whether this tax benefit is sustainable in subsequent quarters as the company navigates the new regulatory landscape.

Akshar Spintex Limited has returned to profitability in Q1FY27, reporting a net profit of ₹59.80 lakh compared to a loss of ₹123.65 lakh in the corresponding quarter of FY26. The Jamnagar-based textile manufacturer saw its revenue from operations rise by 14.3% year-on-year to ₹2,993.31 lakh, driven by higher sales volumes. The Board of Directors approved the unaudited standalone financial results on August 7, 2026, citing improved operational efficiency as a key factor in the margin recovery.

The results were reviewed by the Audit Committee and approved in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory auditors H. B. Kalaria & Associates issued a limited review report under Standard on Review Engagements (SRE) 2410. While the financial statements were prepared in accordance with Ind AS 34, the auditors raised specific caveats regarding compliance and inventory verification that warrant investor attention.

Financial Performance Highlights

The company’s top-line growth was supported by a ₹374.51 lakh increase in revenue from operations compared to the previous year's quarter. However, this was partially offset by a sharp rise in cost of materials consumed, which jumped to ₹2,442.26 lakh from ₹2,425.68 lakh in Q1FY26. Employee benefit expenses also increased to ₹143.68 lakh from ₹135.96 lakh in the corresponding quarter of FY26.

Other income contributed ₹57.32 lakh to the total income, up from ₹50.11 lakh in Q1FY26. Finance costs remained low at ₹7.49 lakh, down from ₹12.02 lakh in the previous year, reflecting reduced interest burdens. Depreciation and amortisation expenses stood at ₹164.65 lakh.

Auditor Caveats and Compliance Issues

Despite the positive financial outcome, the independent auditor’s review report contained significant observations under “Other Matters.” H. B. Kalaria & Associates noted that the company had not made payments for certain statutory dues, specifically professional tax, during the current reporting period. Furthermore, the auditors stated they were unable to carry out necessary reviewing procedures for inventories because the company did not conduct a physical inspection during the quarter. Consequently, the auditors could not obtain sufficient appropriate evidence regarding the existence and condition of inventories.

These disclosures are material for investors assessing the quality of earnings and operational controls. The company continues to monitor the implementation of the New Labour Codes, which became effective on November 21, 2025, and will provide accounting effects based on final government clarifications.

Fund Utilization and Debt Position

Akshar Spintex confirmed no deviation in the utilization of funds raised through its right issue dated October 7, 2024, amounting to ₹4,874.81 lakh. The funds were primarily used to repay long-term unsecured loans and augment working capital. As of June 30, 2026, the company had utilised ₹320.00 lakh towards loan repayment against an allocation of ₹345.67 lakh, leaving an unutilised balance of ₹25.40 lakh. Working capital requirements were fully met with ₹3,300 lakh utilized against the same allocation.

The company’s total financial indebtedness stood at ₹306.03 lakh, comprising loans and revolving facilities from banks and financial institutions. There were no defaults on these loans or any unlisted debt securities. The paid-up equity share capital remained unchanged at ₹7,874.68 lakh, with a face value of ₹1 per share.