Chennai Ferrous reported a 40% decline in revenue from operations to ₹13,231.06 lakh for FY26, driven by lower trading volumes. Net profit fell 16% to ₹338.22 lakh, supported by significant deferred tax benefits.

The company’s 16th Annual General Meeting is scheduled for September 25, 2026, where shareholders will vote on enhancing the board’s borrowing powers to ₹200 crore. The meeting will be held via Video Conferencing.

Financial Performance

Revenue from operations dropped sharply from ₹22,242.73 lakh in FY25 to ₹13,231.06 lakh in FY26. This contraction was primarily due to a decrease in traded items revenue, which fell from ₹21,765.24 lakh to ₹12,979.13 lakh. Other income also declined by nearly half, dropping from ₹214.51 lakh to ₹113.48 lakh, largely due to the absence of profits on share sales recorded in the previous year.

Despite the top-line pressure, the bottom line showed relative resilience. Profit after tax stood at ₹338.22 lakh compared to ₹401.07 lakh in the prior year. This stability was aided by a deferred tax credit of ₹204.45 lakh, which offset current tax expenses of ₹52.76 lakh. In contrast, the previous year saw no deferred tax benefit.

What the Numbers Show

The divergence between operating performance and net profit highlights the impact of tax accounting. While EBITDA contracted by 66.6% to ₹188.08 lakh, net profit declined by only 15.7%. This discrepancy is directly attributable to the ₹204.45 lakh deferred tax credit recognized in FY26, which significantly boosted the final profit figure despite weak operational earnings. Without this non-cash accounting benefit, the profit decline would have mirrored the severe drop in operating margins.

Balance Sheet & Liquidity

The company strengthened its liquidity position during the year. Cash and cash equivalents surged to ₹307.90 lakh from ₹49.57 lakh in the previous year. Total assets decreased to ₹6,941.00 lakh from ₹8,062.08 lakh, reflecting the drawdown of inventories, which stood at nil as of March 31, 2026, compared to ₹1,625.21 lakh in FY25.

Borrowings were fully repaid, with short-term borrowings dropping to zero from ₹166.83 lakh. However, trade payables remained significant at ₹275.33 lakh, down from ₹2,039.09 lakh, indicating improved supplier settlement cycles or reduced procurement activity.

Corporate Actions

Shareholders will consider a special resolution to enhance the board’s borrowing powers under Section 180(1)(c) of the Companies Act, 2013. The proposed limit allows the company to borrow up to ₹200 crore, exceeding the aggregate of paid-up share capital and free reserves. Chairman and Managing Director R. Natarajan retires by rotation and offers himself for reappointment.

No dividend was recommended for FY26. The book closure period runs from September 19, 2026, to September 25, 2026.

Chennai Ferrous Industries Limited approved a significant enhancement to its borrowing capacity during its board meeting held on August 12, 2026. The directors authorized an increase in the company's overall borrowing limits to ₹200 crore, subject to shareholder approval through a special resolution at the ensuing 16th Annual General Meeting. This decision was taken under Section 180(1)(c) of the Companies Act, 2013, allowing the company to borrow over and above its aggregate paid-up share capital and free reserves.

Alongside the borrowing limit revision, the board approved the unaudited standalone financial results for the quarter ended June 30, 2026. The results were reviewed by M/s. Aayush Bohra A & Co., the statutory auditors, who issued a limited review report confirming that the statements comply with Ind AS 34 and SEBI LODR Regulations. No material misstatements were identified in the financial data presented to the board.

The company also refreshed its internal audit framework by appointing M/s. N N Kumar & Associates, Chartered Accountants, Chennai, as its internal auditors for the financial year 2026-27. The firm holds Registration No. 0015049S.

Board Meeting Details

The board meeting commenced at 4:00 pm and concluded at 5:05 pm on August 12, 2026. Balamurugan M, Company Secretary and Compliance Officer, certified the outcomes of the meeting.

What the Numbers Show

The approval of a ₹200 crore borrowing limit indicates the company's intent to scale its operations or manage working capital requirements more flexibly. By seeking shareholder approval for borrowing beyond paid-up capital and free reserves, Chennai Ferrous is positioning itself to leverage debt for potential growth initiatives or asset acquisitions in the coming fiscal year.