Gallantt Ispat Limited has accepted the resignation of M/s. Maroti & Associates as its statutory auditors and appointed M/s. Singhi & Co. to fill the resulting casual vacancy, a move that requires shareholder approval at the ensuing Annual General Meeting (AGM). The change follows Maroti & Associates' decision on July 21, 2026, to discontinue the engagement due to increased audit complexity and firm resource constraints, with no concerns raised regarding management conduct or information suppression.

The Board of Directors, acting on the recommendation of the Audit Committee, formalized the acceptance of the resignation on July 27, 2026. This action was taken after Maroti & Associates issued their limited review report for the quarter ended June 30, 2026, fulfilling their final obligation under SEBI Circular CIR/CFD/CMD/114/2019 dated October 18, 2019. The Audit Committee confirmed that the reasons cited in the resignation letter were aligned with their understanding and that no other material issues existed.

Auditor Transition Details

Maroti & Associates served as statutory auditors for five years, from Financial Year 2022-23 to Financial Year 2026-27. Their term was originally scheduled to expire at the AGM for FY 2026-27 in 2027. The outgoing auditors completed the statutory audit for the financial year ended March 31, 2026, issuing the audit report on May 5, 2026. In their resignation communication, they highlighted that the scale and complexity of the audit had increased considerably, impacting their professional commitments and commercial considerations.

The Board approved the appointment of M/s. Singhi & Co., Chartered Accountants, on July 27, 2026, pursuant to the Companies Act 2013 and Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Singhi & Co. will hold office until the ensuing AGM, where shareholders must ratify the appointment. The firm, described as one of India’s largest assurance and advisory firms with an 85-year legacy, brings expertise in risk-based audits, Ind AS compliance, and tax strategy.

Regulatory Compliance

The company disclosed these changes under Regulation 30 of the SEBI LODR Regulations, 2015, and SEBI Master Circular SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024 (updated as on January 30, 2026). Maroti & Associates confirmed in their declaration that there were no disputes with management and no suppression of information that would have impacted the audit procedures. They also committed to filing form ADT-3 with the Registrar of Companies as required by law. The transition ensures continuity in statutory oversight while addressing the operational constraints cited by the outgoing firm.

Gallantt Ispat Limited reported a 29% year-on-year decline in standalone net profit to ₹124 crore for the quarter ended June 30, 2026 (Q1FY27), primarily due to surging raw material costs and a planned maintenance shutdown at its pellet plant. While revenue from operations grew modestly by 2% to ₹1,146 crore, EBITDA contracted by 20% to ₹203 crore, compressing margins from 23% in Q1FY26 to 18%. Despite the year-on-year pressure, the company’s performance held ground sequentially, with EBITDA margin improving by 50 basis points quarter-on-quarter to 18%, reflecting resilience in its integrated manufacturing model amidst softer steel realizations.

The Board accepted the resignation of statutory auditors M/s Maroti & Associates, effective July 27, 2026, citing resource constraints. The firm, appointed for a five-year term from FY23 to FY27, informed the Board on July 21, 2026, of its inability to continue due to professional commitments. Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and SEBI Circular CIR/CFD/CMD1/114/2019 dated October 18, 2019, the resignation was accepted after the completion of the Q1FY27 review. M/s Singhi & Co., Chartered Accountants, has been appointed as the new statutory auditor, subject to shareholder approval.

Financial Performance

Total income stood at ₹1,163.98 crore, up 2.6% from ₹1,134.60 crore in Q1FY26. However, total expenses rose by 8.8% to ₹999.16 crore. Raw material costs jumped 10% to ₹882.36 crore from ₹800.44 crore year-on-year, driven by higher coal prices and increased open-market iron ore procurement following the annual maintenance shutdown at the Pellet Plant. Employee benefits increased to ₹38.71 crore from ₹31.19 crore, and finance costs rose to ₹8.47 crore from ₹5.65 crore.

EBITDA and Margin Pressure

EBITDA fell by 20% to ₹203 crore, causing the EBITDA margin to compress from 23% in Q1FY26 to 18% in Q1FY27. The EBITDA per tonne declined by 21% to ₹8,787 compared to ₹11,068 in the previous year. Chairman and Managing Director C. P. Agrawal noted that coal and iron ore costs firmed industry-wide, compounded by geopolitical tensions affecting global freight. However, the sequential improvement in margins highlights the structural cost advantages of the company’s integrated model.

Operational Updates and Capex

Production volumes showed mixed trends. TMT Bars production decreased slightly by 0.15% year-on-year to 196.2 KT, while DRI – Sponge Iron production grew by 2% to 236.4 KT. Pellet production dropped significantly by 36% year-on-year to 112.3 KT due to the maintenance shutdown. The company incurred ₹137 crore of capex in Q1FY27, bringing total capex to ₹775 crore since inception, funded entirely through internal accruals without incremental debt. A ₹3,000 crore capex program is underway, focusing on backward integration into iron ore mines in Sonbhadra (UP) and Todpura (Rajasthan), and expanding steel capacity to ~1.23 million MT per annum (MMTPA).

What the Numbers Show

The divergence between modest revenue growth of 2% and sharp expense growth of 8.8% underscores significant margin pressure in Gallantt Ispat’s operations. With raw material costs constituting the bulk of total expenses, the company’s ability to pass on price increases appears limited in the current quarter. The simultaneous resignation of long-term statutory auditors due to resource constraints adds a layer of operational transition risk, although the clean review report suggests no underlying accounting irregularities. The shift towards premium products like Gallantt Advance aims to support higher realizations, potentially offsetting some input cost pressures over time.