Gayatri Highways reported a standalone net loss of ₹274.94 lakh for the quarter ended June 30, 2026 (Q1FY27), widening from the ₹239.42 lakh loss recorded in the preceding quarter. Revenue from operations for the period was ₹709.01 lakh, with total income reaching ₹762.47 lakh after including other income of ₹53.46 lakh.

The Board of Directors approved the unaudited standalone and consolidated financial results on August 13, 2026. In a separate development, the company announced the resignation of its statutory auditors, M/s. PRSV & Co. LLP, effective immediately. The audit firm cited increased professional pre-occupation and manpower constraints as reasons for stepping down.

Financial Performance

The company’s operating expenses for the quarter totaled ₹1,036.49 lakh, driven primarily by finance costs and operating & maintenance expenses. Finance costs remained stable at ₹377.33 lakh, identical to the previous quarter’s figure. Operating & maintenance expenses stood at ₹756.68 lakh, while employee benefits expense was minimal at ₹1.26 lakh.

Consolidated results showed a total loss of ₹282.87 lakh for the quarter, compared to a profit of ₹689.94 lakh in Q4FY26. This swing was largely influenced by the share of losses in jointly controlled entities, which contributed a loss of ₹7.75 lakh in Q1FY27, reversing a profit share of ₹929.56 lakh in the prior quarter.

Auditor Qualifications and Resignation

The limited review report issued by PRSV & Co. LLP carried qualifications regarding several material matters. Key concerns included:

• Unconfirmed Balances: The company had not received balance confirmations from Gayatri Projects Limited (GPL) regarding a written-back Zero Interest Subordinate Loan (ZISL). A portion of ₹4,476.51 lakh remains unconfirmed as written off by GPL.
• Defaulted Loans: The company defaulted on a term loan of ₹3,822.65 lakh and accumulated interest of ₹1,193.21 lakh payable to IL&FS Financial Services Limited. Interest recognition has been disputed due to lack of lender confirmation.
• Impairment Issues: The auditors noted that investments in jointly controlled entities Cyberabad Expressways Limited (CEL) and Hyderabad Expressways Limited (HEL) require impairment given their negative or eroded net worths. The company has not yet provided for these impairments in its books.

PRSV & Co. LLP resigned as statutory auditor on August 13, 2026, stating that the decision was not due to an inability to obtain sufficient appropriate audit evidence but rather due to resource constraints.

What the Numbers Show

The financial data reveals a significant dependency on non-operating factors for income stability. In Q1FY27, revenue from operations was ₹709.01 lakh, while other income contributed only ₹53.46 lakh. However, comparing this to the same quarter last year (Q1FY26), other income was a massive ₹3,556.73 lakh against zero operational revenue. This sharp contrast highlights the volatility in the company's income streams, with current operations generating modest revenue against high fixed finance costs, leading to continued operational losses.

Gayatri Highways Limited has amended its Securities Purchase Agreement (SPA) regarding the sale of its entire stake in HKR Roadways Limited to Cube Highways and Infrastructure V Pte. Limited. Executed on August 11, 2026, the amendment removes the original escrow mechanism and extends the Long Stop Date to August 31, 2026, facilitating the finalization of the deal. The company disclosed that these changes are not expected to have any material adverse impact on its management or control.

The disclosure was made pursuant to Regulation 30 of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, and circular HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. This update follows the initial execution of the SPA disclosed on February 12, 2026. Kotak Special Situations Fund remains a seller alongside Gayatri Highways Limited in the transaction.

Key Amendments to the Agreement

The Amendment Agreement modifies several structural elements of the original SPA to streamline the closing process. The primary changes involve the removal of complex financial safeguards and an extension of the timeline for completion.

Liabilities and Indemnities

Gayatri Highways Limited has outlined specific contingent liabilities arising from the transaction. The company agreed to provide a specific indemnity towards stamp duty, though the exposure value can only be estimated when the liability arises. Additionally, the company provided standard indemnities for losses stemming from breaches of fundamental warranties, fraud, gross negligence, or wilful misconduct by Gayatri Highways Limited or HKR Roadways Limited. The financial impact of these warranty indemnities cannot be estimated at this stage.

Furthermore, the company proposes to waive a redemption premium subject to legal compliances. This waiver is scheduled to take place just before the consummation of the Securities Purchase Agreement. Like the other indemnities, the financial impact of this waiver cannot currently be estimated.

Transaction Structure

The transaction involves the sale of the entire stake held by Gayatri Highways Limited in HKR Roadways Limited. Upon completion, Cube Highways and Infrastructure V Pte. Limited will become the sponsor/promoter of HKR Roadways Limited. The parties confirmed that none of the counterparties are related to the promoter or promoter group of Gayatri Highways Limited, and the transaction does not fall within the definition of a Related Party Transaction. The agreement does not provide for any nominee director on the Board of the listed entity, nor does it create any conflict of interest.