India Homes reported a standalone net profit of ₹344.16 lakh for the quarter ended June 30, 2026 (Q1FY27), compared to a net loss of ₹147.57 lakh in the corresponding period of FY26. The turnaround was driven by an exceptional item gain of ₹665.20 lakh arising from a settlement with lenders, which offset operating losses. While the company posted a profit, statutory auditors Laxmikant Kabra & Co LLP issued a disclaimer of opinion on the financial statements, citing pervasive material weaknesses, inaccessible accounting records, and significant doubts about the company’s ability to continue as a going concern.

The Board of Directors approved the unaudited financial results and a proposal to invest up to ₹50 crore in Level Enterprises LLP, a related party holding a development agreement for land in Mumbai. The investment aims to make India Homes a major partner with at least 51% stake in the LLP, subject to regulatory approvals. The Board also revised the notice for its 39th Annual General Meeting. The financial results were submitted pursuant to Regulation 30 and Regulation 33(3)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance

Revenue from operations was nil for the quarter, consistent with the previous year. Total income stood at ₹23.30 lakh, comprising other income from steel activities. Total expenses rose to ₹344.34 lakh from ₹161.03 lakh in Q1FY26, primarily due to higher finance costs of ₹179.07 lakh and employee benefits of ₹75.99 lakh. Before exceptional items, the company reported a loss of ₹321.04 lakh. The exceptional gain of ₹665.20 lakh, resulting from a settlement with J.C. Flowers Asset Reconstruction Private Limited, turned the result profitable. Basic earnings per share (EPS) after exceptional items were ₹0.09, compared to a loss of ₹0.04 per share in Q1FY26.

Auditor’s Disclaimer and Material Weaknesses

Laxmikant Kabra & Co LLP, the independent auditors, stated they were unable to obtain sufficient appropriate audit evidence due to several critical issues. The primary accounting software (SAP) and underlying records were inaccessible, forcing the company to prepare books using alternative software and backup records. Consequently, the auditors could not verify the completeness or accuracy of the financial information.

Key areas of concern included:

• Inventory Valuation: Inventories worth ₹13,696.20 lakh were not valued at the lower of cost or net realizable value as required by Ind AS 2. Work-in-progress of ₹10,608.94 lakh and raw materials of ₹1,867.67 lakh appeared recoverable only at scrap value, but proper physical verification and aging analysis were missing.
• Contingent Gain Recognition: The company recognized a ₹730.05 lakh gain from a settlement with J.C. Flowers Asset Reconstruction Private Limited. However, the auditors noted that the payment deadline of July 31, 2026, had passed without payment, meaning the conditions for recognizing the gain were not fulfilled. This potentially overstates profit by ₹730.05 lakh.
• Related Party Transactions: The company took over work-in-progress worth ₹1.67 crore from a director, recognized as current assets. The auditors found no independently verifiable evidence of tangible assets or future economic benefits associated with this transaction.
• Going Concern: Current liabilities exceeded current assets, and operations have substantially ceased. The auditors expressed significant doubt about the company’s ability to continue as a going concern.

Debt Defaults and Asset Status

The company disclosed outstanding defaults on loans and debt securities. As of June 30, 2026, the default amount on loans/revolving facilities was ₹2,507.42 lakh, and the default on unlisted debt securities (NCDs/NCRPS) was ₹6,418.58 lakh. Total financial indebtedness stood at ₹8,926.00 lakh. Additionally, the factory premises remain in the possession of J.C. Flowers Asset Reconstruction Private Limited following the assignment of debt by Dombivli Nagari Sahakari Bank Limited. Freehold land has been reclassified as “Assets Held for Sale” under Ind AS 105, but its fair value less costs to sell has not been determined as negotiations are ongoing.

India Homes Limited disclosed on July 31, 2026, that it and its group companies have received a formal notice from the Office of the Regional Director, Western Region, Mumbai-II. The notice, issued by an officer holding the additional charge of Joint Director, Regional Director, Western Region-I, seeks specific information and records from the entity. This regulatory inquiry represents a material compliance event for the real estate developer, requiring immediate attention to corporate governance protocols.

The request for information was made pursuant to Section 210(1)(c) read with Section 217(1)(a) of the Companies Act, 2013. These sections empower the Regional Director to call for reports or information regarding the management and conduct of the affairs of a company. The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates timely reporting of such regulatory interactions to stock exchanges.

India Homes Limited confirmed that it is currently in the process of compiling the requisite information and documents requested by the authority. The company indicated that it shall furnish the same to the Regional Director in due course. No specific details regarding the nature of the information sought or the underlying subject matter of the inquiry were provided in the exchange filing.

The notice was addressed to the Department of Corporate Services at BSE Limited, located in Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. The disclosure was signed by Varun S. Gupta, Managing Director of India Homes Limited (DIN: 02938137). The company’s registered office is located at India Steel Complex, Khopoli, Raigad, Maharashtra, while its corporate office is situated in Lower Parel, Mumbai.

Regulatory Context

The invocation of Section 210(1)(c) of the Companies Act, 2013, allows the Central Government or authorized officers to require any person to furnish information or explanations regarding the formation, management, or conduct of a company. Section 217(1)(a) further empowers the Regional Director to make inquiries into the affairs of a company if they appear to be conducted in a manner prejudicial to public interest or the interests of the members.

Such notices are part of routine regulatory oversight but can also signal deeper scrutiny into corporate governance, financial reporting, or operational compliance. For listed entities like India Homes Limited, transparency in disclosing these interactions is critical to maintaining investor confidence and adhering to SEBI’s listing obligations.

What This Means for Stakeholders

While the receipt of a notice does not imply guilt or violation, it necessitates a thorough review of internal records and potential engagement with legal counsel. Investors should monitor subsequent filings for updates on the outcome of this inquiry. If the Regional Director finds discrepancies or non-compliance, further actions such as penalties or directives could follow. Conversely, a satisfactory response may conclude the matter without further escalation. The company’s prompt acknowledgment and commitment to providing the requested data demonstrate adherence to procedural compliance requirements.