CHL Ltd Q1 Results: Net profit falls 42% YoY to ₹2.94 crore

CHL Limited reported a significant year-on-year decline in standalone profitability for the first quarter of FY26, with net profit falling 42% to ₹2.94 crore from ₹5.04 crore in Q1FY25. The drop was driven by a contraction in revenue from operations and higher operational expenses. However, the consolidated net profit rose sharply to ₹10.14 crore, compared to a loss of ₹82.02 lakh in the corresponding period last year, largely due to non-operating foreign exchange gains recognized by its subsidiary, CJSC CHL International.

The Board of Directors approved the unaudited financial results at a meeting held on July 30, 2026. The results were reviewed by D G A & Co., the independent auditors, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audit report included an emphasis of matter regarding pending litigation involving Export Import Bank of India (EXIM Bank) against the company as a corporate guarantor for a loan availed by CJSC CHL International.

Financial Performance

Standalone revenue from operations decreased to ₹21.24 crore in Q1FY26, down from ₹19.71 crore in Q1FY25, representing a modest growth that was offset by rising costs. Total expenses stood at ₹20.46 crore, up from ₹17.23 crore in the prior year quarter. Employee benefit expenses increased to ₹6.52 crore from ₹6.31 crore, while operational expenses rose significantly to ₹10.81 crore from ₹8.34 crore. Other income declined to ₹3.27 crore from ₹4.32 crore.

In consolidated terms, revenue from operations grew 11% to ₹34.76 crore from ₹31.44 crore. Other income saw a substantial jump to ₹14.94 crore from ₹4.61 crore, primarily due to exchange fluctuation gains. The subsidiary recognized foreign exchange gains of ₹11.40 crore arising from the appreciation of the Tajikistani Somoni against the US Dollar, which reduced foreign currency-denominated liabilities. These gains were classified as other income since they did not arise from principal operating activities.

Metric	Standalone Q1FY26	Standalone Q1FY25	Consolidated Q1FY26	Consolidated Q1FY25
Revenue from Operations (₹ cr)	21.24	19.71	34.76	31.44
Other Income (₹ cr)	3.27	4.32	14.94	4.61
Total Expenses (₹ cr)	20.46	17.23	38.45	35.10
Net Profit (₹ cr)	2.94	5.04	10.14	-0.82
EPS Basic & Diluted (₹)	0.54	0.92	8.40	-0.89

Litigation and Settlement Updates

The company disclosed ongoing legal proceedings related to a USD 32.50 million term loan from EXIM Bank for the construction of a five-star hotel in Dushanbe, Tajikistan. CHL Limited acted as a corporate guarantor alongside Late Dr. L K Malhotra. EXIM Bank had previously filed applications before the National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT). The NCLT dismissed the petition, a decision upheld by the National Company Law Appellate Tribunal (NCLAT). EXIM Bank’s civil appeal challenging this judgment is pending before the Supreme Court of India.

A One Time Settlement (OTS) was executed between EXIM Bank, the principal borrower, and the guarantors, crystallizing the liability of CJSC CHL International to USD 34 million. This settlement is currently under implementation. EXIM Bank has filed separate applications before DRT-III regarding the personal and corporate guarantors, noting that the settlement is being implemented. The next hearing date for the DRT case is August 18, 2026.

What the Numbers Show

The divergence between standalone and consolidated performance highlights the impact of non-operating items on the group's bottom line. While standalone operations faced margin pressure with expenses rising faster than revenue, the consolidated result was heavily influenced by currency translation effects. The subsidiary CJSC CHL International reported total assets of ₹85,682 crore, including a revalued building of ₹52,528 crore. The recognition of ₹11.40 crore in forex gains and ₹35.92 crore in other comprehensive income (OCI) from currency translation reserves underscores the sensitivity of the group's financials to foreign exchange fluctuations in Tajikistan.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.71%	+7.51%	+5.17%	-12.31%	-20.94%	+171.17%

CHL Limited reported a consolidated net profit of ₹101.38 crore for the first quarter ended June 30, 2026, marking a significant turnaround from the net loss of ₹82.02 lakh recorded in Q1FY26. The surge in profitability was primarily driven by non-operating items, specifically a foreign currency translation gain of ₹35.92 crore recognized under Other Comprehensive Income (OCI) due to the appreciation of the Tajikistani Somoni against the US Dollar. Meanwhile, standalone operations showed modest growth, with revenue from operations rising 7.8% year-on-year to ₹212.40 lakh, although standalone net profit fell 41.6% to ₹29.44 lakh.

The Board of Directors, chaired by Managing Director Luv Malhotra, approved the unaudited financial results at a meeting held on July 30, 2026, in New Delhi. The results were reviewed by the Audit Committee and subsequently submitted to the Bombay Stock Exchange pursuant to Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory auditors D G A & Co. issued a limited review report, providing moderate assurance that the financial statements are free from material misstatement.

Financial Performance Overview

Standalone revenue from operations increased to ₹212.40 lakh in Q1FY27, up from ₹197.10 lakh in the corresponding quarter of FY26. However, total income saw a slight dip due to a decline in other income, which fell to ₹32.67 lakh from ₹43.20 lakh in Q1FY26. Consequently, standalone profit before tax decreased to ₹40.52 lakh from ₹68.03 lakh. After accounting for tax expenses of ₹11.08 lakh, the net profit for the period stood at ₹29.44 lakh, down from ₹50.40 lakh previously.

In contrast, the consolidated figures reflected substantial volatility due to foreign exchange movements. Consolidated revenue from operations remained relatively stable at ₹347.58 lakh, compared to ₹314.40 lakh in Q1FY26. The key driver for the consolidated bottom line was the OCI component. The subsidiary, CJSC CHL International, recognized foreign exchange gains of ₹11.40 crore from currency appreciation, classified as other income. Additionally, the conversion of assets and liabilities resulted in a ₹35.92 crore gain under OCI-Foreign Currency Translation Reserves, which significantly boosted the total comprehensive income to ₹460.66 crore.

Metric	Standalone Q1FY27	Standalone Q1FY26	Change (%)	Consolidated Q1FY27	Consolidated Q1FY26	Change (%)
Revenue from Operations (₹ Lakh)	2,124.03	1,971.05	+7.8%	3,475.79	3,144.04	+10.6%
Total Income (₹ Lakh)	2,450.77	2,403.05	+2.0%	4,969.86	3,604.66	+37.9%
Profit Before Tax (₹ Lakh)	405.25	680.39	-40.4%	1,124.65	94.36	+1,091.9%
Net Profit (₹ Lakh)	294.40	504.01	-41.6%	1,013.80	-82.02	Turnaround
EPS Basic & Diluted (₹)	0.54	0.92	-41.3%	8.40	-0.89	Turnaround

Legal and Regulatory Disclosures

The auditor’s report included an emphasis of matter regarding ongoing litigation involving the subsidiary CJSC CHL International. The company acts as a corporate guarantor for a USD 32.50 million term loan availed by the subsidiary from the Export Import Bank of India (EXIM Bank) for a hotel project in Dushanbe, Tajikistan. EXIM Bank has filed applications before the National Company Law Tribunal (NCLT), Debt Recovery Tribunal (DRT), and the Supreme Court of India.

A One Time Settlement (OTS) was executed between EXIM Bank, the borrower, and guarantors, crystallizing the liability at USD 34 million. This settlement is currently under implementation as of June 30, 2026. The auditor noted that while the litigation remains pending adjudication in the Supreme Court and DRT, the OTS has been brought on record in the pending original applications. The company’s conclusion on the financial statements was not modified regarding this matter.

What the Numbers Show

The divergence between standalone and consolidated results highlights the company’s exposure to foreign exchange fluctuations through its Tajikistan subsidiary. While core operational revenue grew steadily by nearly 8% on a standalone basis, the consolidated bottom line was disproportionately influenced by non-cash accounting gains related to currency translation. The ₹35.92 crore OCI gain underscores how macroeconomic factors in emerging markets can significantly impact reported equity and comprehensive income, even when operational cash flows remain stable. Investors should note that the consolidated net profit improvement is largely structural rather than operational.