Eastern Silk Industries Limited reported a net loss of ₹80.02 lakh for the first quarter ended June 30, 2026, compared to a net loss of ₹18.50 lakh in the same quarter of the previous year. The company’s revenue from operations rose 10.4% year-on-year to ₹742.87 lakh, reflecting modest growth in its silk yarn and fabric business. However, this top-line expansion was offset by a significant increase in employee benefit expenses and other operational costs, leading to a wider bottom-line deficit.

The Board of Directors approved the unaudited standalone financial results on August 7, 2026. The results were subjected to a limited review by the statutory auditors, B.K. Shroff & Co., who issued an unmodified opinion. The filing was made pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company also announced that its 80th Annual General Meeting (AGM) will be held on September 26, 2026, via video conferencing or other audio-visual means.

Financial Performance Highlights

Revenue from operations grew to ₹742.87 lakh from ₹672.69 lakh in Q1FY25. Other income also saw a substantial increase, rising to ₹60.54 lakh from ₹40.36 lakh in the prior year quarter. This boost in other income helped cushion the impact of rising operational costs, though it was insufficient to return the company to profitability.

Cost Pressures and Operational Updates

Employee benefit expenses emerged as a key cost driver, increasing by 17.8% to ₹392.65 lakh from ₹333.37 lakh in the corresponding period of the previous year. Other expenses also rose by 21.0% to ₹248.99 lakh. Despite these increases, finance costs remained negligible at nil for the quarter, compared to ₹0.37 lakh in Q1FY25.

The company recognized a government grant of ₹1.36 lakh under the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), which was presented as a reduction from employee benefit expenses in compliance with Ind AS 20. Additionally, the company had previously accounted for an exceptional item of ₹20.60 lakh during FY26 related to new Labour Codes, which does not impact the current quarter’s standalone loss calculation but reflects ongoing regulatory adjustments.

What the Numbers Show

The divergence between revenue growth and margin contraction highlights persistent cost structure challenges for Eastern Silk Industries. While top-line growth of over 10% indicates stable demand for its silk products, the nearly 18% rise in employee benefits suggests wage inflation or headcount increases are eroding operational efficiency. The significant jump in other income provides temporary relief but underscores that core operational profitability remains under pressure. Investors should monitor whether cost containment measures can align with revenue trends in subsequent quarters.

Corporate Actions

The register of members and share transfer books will remain closed from September 20, 2026, to September 26, 2026, for the purpose of the AGM. The annual report and notice for the 80th AGM will be dispatched in due course. Notably, M/s B.K. Shroff & Co. resigned as statutory auditors effective June 18, 2026, but issued the limited review report for the quarter in compliance with SEBI circulars.

eastern silk industries has appointed M/s Vyas and Vyas, Chartered Accountants, as its statutory auditor effective July 7, 2026. The appointment fills the casual vacancy caused by the resignation of M/s B K Shroff & Co. The new firm will hold office until the conclusion of the ensuing Annual General Meeting.

The Board of Directors approved the appointment based on the recommendation of the Audit Committee and subject to shareholder approval. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Vyas and Vyas is a professionally managed Chartered Accountancy Firm registered with The Institute of Chartered Accountants of India (ICAI). The firm holds a Peer Review certification from ICAI and has expertise in Statutory Audit, Tax Audit, Internal Audit, and related advisory services.

The table below details the change in auditors: