Arc Insulation FY26 Net Profit Drops to ₹185.51 Lakh as Revenue Declines
Arc Insulation & Insulators Limited reported a sharp decline in FY26 profitability, with net profit falling to ₹185.51 lakh from ₹868.60 lakh and revenue from operations contracting to ₹2,086.86 lakh from ₹3,271.64 lakh. Despite weaker earnings, total assets expanded significantly to ₹6,798.34 lakh from ₹3,928.51 lakh, driven by IPO proceeds of ₹3,168.04 lakh, of which ₹1,390.52 lakh had been utilised as at March 31, 2026. The audited results were approved by the board on May 30, 2026, with an unmodified audit opinion from M/s. Jay Gupta & Associates.
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Arc Insulation & Insulators Limited reported a significant decline in financial performance for the financial year ended March 31, 2026, with net profit falling to ₹185.51 lakh from ₹868.60 lakh in the previous year. Revenue from operations also contracted to ₹2,086.86 lakh in FY26 from ₹3,271.64 lakh in FY25. The board of directors approved the audited standalone financial results at a meeting held on May 30, 2026, with statutory auditors M/s. Jay Gupta & Associates issuing an unmodified audit opinion.
Financial Performance
The company's profit before tax for FY26 stood at ₹278.31 lakh, a steep decline from ₹1,159.44 lakh in FY25. Total income for the year was ₹2,171.79 lakh, compared to ₹3,315.32 lakh in the prior year. Total expenses for FY26 were ₹1,893.48 lakh against ₹2,155.88 lakh in FY25. The basic and diluted earnings per share (EPS) for FY26 were ₹2.05, compared to ₹12.32 in FY25. The following table summarises the key financial metrics:
| Metric: | FY26 (₹ in Lakhs) | FY25 (₹ in Lakhs) |
|---|---|---|
| Revenue from Operations: | 2,086.86 | 3,271.64 |
| Other Income: | 84.93 | 43.68 |
| Total Income: | 2,171.79 | 3,315.32 |
| Total Expenses: | 1,893.48 | 2,155.88 |
| Profit Before Tax: | 278.31 | 1,159.44 |
| Net Profit: | 185.51 | 868.60 |
| Basic & Diluted EPS (₹): | 2.05 | 12.32 |
For the half year ended March 31, 2026, revenue from operations was ₹1,084.90 lakh, with profit after tax at ₹99.54 lakh. The preceding half year ended September 30, 2025 recorded revenue of ₹1,001.96 lakh and profit after tax of ₹85.97 lakh.
Balance Sheet and Cash Flows
Arc Insulation & Insulators' total assets rose to ₹6,798.34 lakh as of March 31, 2026, from ₹3,928.51 lakh a year earlier, reflecting significant balance sheet expansion. Equity share capital increased to ₹1,029.74 lakh from ₹725.24 lakh, while other equity grew to ₹4,989.31 lakh from ₹1,778.90 lakh, taking total equity to ₹6,019.05 lakh. Cash and cash equivalents improved to ₹181.28 lakh from ₹76.39 lakh. Other bank balances stood at ₹1,938.87 lakh as at March 31, 2026, compared to nil in the prior year. The key balance sheet figures are presented below:
| Metric: | FY26 (₹ in Lakhs) | FY25 (₹ in Lakhs) |
|---|---|---|
| Equity Share Capital: | 1,029.74 | 725.24 |
| Other Equity: | 4,989.31 | 1,778.90 |
| Total Equity: | 6,019.05 | 2,504.14 |
| Total Non-Current Liabilities: | 60.46 | 331.43 |
| Total Current Liabilities: | 718.83 | 1,092.94 |
| Property, Plant & Equipment: | 1,477.32 | 1,304.96 |
| Inventories: | 1,173.14 | 770.60 |
| Trade Receivables: | 954.93 | 1,205.84 |
| Cash and Cash Equivalents: | 181.28 | 76.39 |
| Other Bank Balances: | 1,938.87 | — |
| Total Assets: | 6,798.34 | 3,928.51 |
From a cash flow perspective, net cash used in operating activities was ₹241.55 lakh in FY26, compared to net cash generated of ₹26.24 lakh in FY25. Net cash used in investing activities was ₹2,370.08 lakh, driven primarily by changes in other bank balances of ₹1,938.87 lakh and purchase of property, plant and equipment of ₹273.69 lakh. Net cash from financing activities was ₹2,716.51 lakh, primarily on account of an increase in share capital of ₹3,806.25 lakh, partially offset by issue-related expenses of ₹476.86 lakh and repayment of long-term borrowings of ₹309.84 lakh.
IPO Fund Utilisation
The company disclosed the utilisation of funds raised through its Initial Public Offer (IPO). Out of total net proceeds of ₹3,168.04 lakh, ₹1,390.52 lakh had been utilised as of March 31, 2026. The unutilised amount of ₹1,777.52 lakh was deposited as liquid fixed deposits with the State Bank of India. Key utilisations included ₹316.69 lakh for capital expenditure on a new manufacturing unit and ₹297.19 lakh for the purchase of new office space.
| Parameter: | Details |
|---|---|
| Total IPO Net Proceeds: | ₹3,168.04 lakh |
| Amount Utilised (as at March 31, 2026): | ₹1,390.52 lakh |
| Unutilised Amount: | ₹1,777.52 lakh |
| Unutilised Funds Deposited With: | State Bank of India (liquid FDs) |
| Capex – New Manufacturing Unit: | ₹316.69 lakh |
| Purchase of New Office Space: | ₹297.19 lakh |
Auditor and Board Approval
M/s. Jay Gupta & Associates, Chartered Accountants (FRN: 329001E), issued an audit report with an unmodified opinion on the standalone financial results for the half year and year ended March 31, 2026. The financial results were reviewed by the Audit Committee and approved by the board of directors at a meeting held on May 30, 2026. The company is listed on the SME Platform of NSE and has noted that IND-AS compliance is not applicable. Arc Insulation & Insulators operates in a single business segment, and accordingly, segment reporting is not applicable.
Historical Stock Returns for ARC Insulation & Insulators
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.93% | -15.00% | -32.37% | -35.71% | -63.59% | -63.59% |
What specific market factors caused the 36% revenue decline despite the recent capital infusion?
How will the company utilize the remaining ₹1,777.52 lakh in unutilized IPO funds to reverse the downward earnings trend?
What is the expected timeline for the new manufacturing unit to become operational and contribute to top-line growth?
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