Deep Polymers Limited reported a standalone net profit of ₹190.93 lakh for the first quarter ended June 30, 2026, compared to ₹144.19 lakh in the corresponding quarter of the previous year. Revenue from operations rose to ₹3,007.98 lakh from ₹2,540.01 lakh year-on-year. Despite the top-line growth and reported profitability, the financial results carry significant risk due to a qualified audit opinion that could materially reduce the stated earnings.

The Board of Directors approved the unaudited standalone and consolidated financial results at its meeting held on August 12, 2026, in Gandhinagar. The filing was submitted pursuant to Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory auditors S N Shah & Associates issued an audit report with a modified opinion, marking the sixth consecutive instance of such qualification for the standalone accounts and the fifth for consolidated accounts.

Financial Performance Overview

The company’s total income stood at ₹3,113.70 lakh, driven by operational revenue and other income of ₹105.72 lakh. Total expenses were recorded at ₹2,859.05 lakh, including cost of material consumed at ₹2,108.43 lakh and employee benefit expenses of ₹161.86 lakh. Finance costs increased to ₹39.81 lakh from ₹17.54 lakh in the prior year quarter. The basic earnings per share (EPS) was reported at ₹0.79, up from ₹0.60 in Q1FY25.

Audit Qualifications and Impact

The material disclosure in the filing centers on two key audit qualifications that distort the reported financial health. First, trade receivables include ₹308.06 lakh outstanding against which legal recovery procedures have been initiated. The auditors noted that the company failed to make necessary provisions for doubtful debts amounting to ₹158.06 lakh. This non-provision has resulted in an overstatement of profit, current trade receivables, and shareholder funds by ₹158.06 lakh.

Second, monetary items denominated in foreign currencies were not restated at prevailing exchange rates as required under Ind AS 21. This non-compliance has led to an overstatement or understatement of foreign currency-denominated financial items and consequent profits. Management stated it is unable to estimate the impact of this second qualification but acknowledged the non-compliance.

What the Numbers Show

The divergence between reported and adjusted figures is stark. While Deep Polymers reports a net profit of ₹190.93 lakh, adjusting for the quantified audit qualification regarding doubtful debts reduces this figure to just ₹32.87 lakh. Similarly, the adjusted EPS drops from ₹0.79 to ₹0.14. This indicates that the majority of the reported profit is contingent on the recovery of disputed receivables rather than core operational efficiency. Furthermore, the Hajipur segment posted a loss before finance costs and tax of ₹1.21 lakh, continuing its trend of negative contribution compared to the profitable Rakanpur and Santej segments.

Deep Polymers Limited reported a 28.7% increase in net profit to ₹665.59 lakh for the financial year ended March 31, 2026, compared to ₹517.34 lakh in the previous year. Revenue from operations for the year rose marginally to ₹9,872.42 lakh from ₹9,817.16 lakh in FY25. The board approved the audited financial results for the fourth quarter and year ended March 31, 2026, at a meeting held on May 30, 2026.

For the quarter ended March 31, 2026, the company recorded a net profit of ₹263.72 lakh, a significant increase from ₹39.19 lakh in the same period last year. Revenue from operations for the quarter stood at ₹2,655.49 lakh, up from ₹2,299.99 lakh in Q4FY25. Total income for the quarter increased to ₹2,891.06 lakh from ₹2,359.37 lakh in the corresponding quarter of the previous year.

Auditor's Report

M/s. S N Shah & Associates, Statutory Auditors, issued an audit report with a modified opinion. The auditors qualified their opinion regarding the non-provision of doubtful debts amounting to ₹308.06 lakh on trade receivables for which legal proceedings have been initiated. Additionally, the company did not restate monetary items denominated in foreign currencies at the exchange rates prevailing at the end of the reporting period as required by Ind-AS 21.

Financial Highlights

The company's basic earnings per share (EPS) for FY26 increased to ₹7.21 from ₹2.11 in the previous year. For the quarter ended March 31, 2026, basic EPS stood at ₹5.55 compared to ₹0.14 in the same quarter of the previous year. Other equity excluding revaluation reserve rose to ₹8,076.58 lakh as of March 31, 2026, from ₹6,335.79 lakh a year ago.

The intimation was signed by Rameshbhai Bhimjibhai Patel, Managing Director of Deep Polymers Limited.