IL&FS Engineering and Construction Company Limited returned to profitability in the financial year ended March 31, 2026, posting a net profit of ₹19 lakh compared to a net loss of ₹492 lakh in the previous year. Revenue from operations fell significantly to ₹18,792 lakh from ₹32,138 lakh in FY25. The company’s ability to continue as a going concern remains dependent on the finalisation and approval of the resolution process, which is not wholly within its control.

Financial Performance

For the quarter ended March 31, 2026, the company reported a net profit of ₹971 lakh, a substantial increase from the net profit of ₹735 lakh in the corresponding quarter of the previous year. Total income for the quarter stood at ₹6,176 lakh, down from ₹12,905 lakh in Q4 FY25. On a consolidated basis, the net profit for FY26 was ₹133 lakh, reversing the net loss of ₹488 lakh recorded in FY25. Consolidated revenue from operations for the year mirrored the standalone figures at ₹18,792 lakh.

The following table outlines the key financial metrics for the standalone entity for the year ended March 31, 2026:

Audit Observations and Qualifications

M. Bhaskara Rao & Co., the statutory auditors, issued an unmodified opinion on the standalone financial results. However, the auditors issued a qualified opinion on the consolidated financial results. The qualification arises because the consolidated results do not include the financial information of the overseas subsidiary, Maytas Infra Saudi Arabia Company, as the entity has ceased operations for over three years and financial information is unavailable. The auditors stated they are unable to comment on the impact of this exclusion on the group's financial results.

Going Concern and Regulatory Matters

The auditors highlighted a material uncertainty relating to the company's status as a going concern. This is due to continued losses, the erosion of net worth, and a significant reduction in income from operations. The company’s net worth stood at a negative ₹3,31,766 lakh as of March 31, 2026. The auditors noted that the company’s ability to continue as a going concern is solely dependent on the resolution process initiated by the Reconstituted Board.

Additionally, the auditors drew attention to ongoing investigations by regulatory agencies, including the Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED), against the parent entity IL&FS and its subsidiaries. The financial results do not include adjustments that may arise from these investigations. The company also did not recognize interest expense of ₹46,044 lakh for FY26, following an NCLAT order that specified October 15, 2018, as the cut-off date for the resolution process.

IL&FS Engineering and Construction Company Limited has re-appointed M/s. Narasimha Murthy & Co. as its cost auditors for the financial year 2026-2027. The Board of Directors approved the re-appointment at its meeting held on May 27, 2026, upon the recommendation of the Audit Committee. The firm will conduct the audit of cost records pertaining to road and other infrastructure projects for the year commencing on April 1, 2026, and ending on March 31, 2027.

The terms of the re-appointment include the same conditions as the previous engagement, plus applicable GST and reimbursement of actual out-of-pocket expenses. M/s. Narasimha Murthy & Co., Cost Accountants (FRN: 000042), is a firm established in 1983. The firm offers services such as cost audit, GST audits, cost reduction programmes, SWOT analysis, management audit, business valuations, and strategic planning.

The disclosures regarding the re-appointment were made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This includes references to SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023, and the SEBI LODR Master Circular dated January 30, 2026.