Innovative Tech Pack reported a standalone net loss of ₹78.37 lakh for the quarter ended June 30, 2026 (Q1FY26), marking a significant reversal from the ₹52.02 lakh profit recorded in the preceding quarter and a ₹131.83 lakh profit in Q1FY25.

Revenue from operations rose 10.3% year-on-year to ₹3,594.90 lakh, up from ₹3,258.25 lakh in the corresponding period of FY25. However, the top-line growth was insufficient to offset rising input costs and financial expenses, leading to a pre-tax loss for the period.

Financial Performance

The company’s total income stood at ₹3,606.11 lakh, driven primarily by operational revenue. Other income declined sharply to ₹11.21 lakh from ₹64.07 lakh in Q4FY26, partly due to lower gains on asset sales compared to the previous quarter.

Cost of materials consumed increased significantly to ₹2,735.40 lakh, up from ₹2,333.16 lakh in Q4FY26 and ₹2,137.10 lakh in Q1FY25. This rise in raw material costs was a primary driver of margin compression. Finance costs also surged to ₹90.93 lakh, compared to ₹63.26 lakh in Q1FY25, further pressuring profitability.

What the Numbers Show

A critical divergence is visible between revenue growth and cost management. While revenue grew by approximately 10% year-on-year, the cost of materials consumed rose by nearly 28% over the same period. This disparity indicates that input cost inflation outpaced pricing power or volume efficiency, directly eroding operating margins. Additionally, the decline in other income removed a minor buffer that had contributed to profits in prior quarters.

Auditor Observations

Mahesh Yadav & Co., the reviewing chartered accountants, issued an unqualified report with several emphases of matter:

• Cash wage payments: The company paid wages amounting to ₹16.10 lakh in cash to contract workers, citing limits under Provident Fund and ESI laws.
• Pending bonus: A bonus liability of ₹15.92 lakh pertaining to previous financial years remains unpaid as of June 30, 2026.
• Internal audit: No internal audit was conducted during the quarter, despite management stating an internal audit team exists.
• MSME payments: The company did not pay interest on delayed payments to MSME creditors, asserting that payments were made within agreed supply terms exceeding 45 days.

The Board of Directors approved the unaudited standalone financial results on August 13, 2026.

Innovative Tech Pack returned to profitability in the financial year ended March 31, 2026, reporting a net profit of ₹186.72 lakh compared to a loss of ₹1.81 lakh in the previous year. The company's revenue from operations for the year stood at ₹12,711.78 lakh, while total income reached ₹12,817.02 lakh. For the quarter ended March 31, 2026, the company posted a profit of ₹52.02 lakh, a significant turnaround from the loss of ₹329.32 lakh in the corresponding quarter of the previous year.

The Board of Directors approved the audited standalone financial results for the quarter and year ended March 31, 2026, at a meeting held on May 29, 2026. M/s Mahesh Yadav & Co., Statutory Auditors, issued an unmodified opinion on the financial statements. However, the auditors drew attention to several material matters, including the write-off of debtors amounting to ₹141.20 lakh due to non-recovery despite NCLT proceedings and the payment of wages to contract workers in cash amounting to ₹94 lakh.

Financial Performance

The company's financial performance improved due to a reduction in total expenses, which decreased to ₹12,630.36 lakh in FY26 from ₹13,471.98 lakh in FY25. Key expense heads such as employee benefits expenses and other expenditure saw a decline during the year. Finance costs, however, increased to ₹500.65 lakh from ₹454.73 lakh in the previous year.

Auditor's Emphasis of Matter

The statutory auditor highlighted several compliance and operational risks in the report. The company has not appointed an internal auditor as per Section 138 of the Companies Act, 2013, for FY 2025-26. Additionally, actuarial valuation certificates for gratuity and leave encashment were not obtained for the year, with disclosures based on the valuation done for the year ended March 31, 2023. Trade receivables and trade payables remain subject to reconciliation and confirmation due to pending balance confirmations.

Other significant disclosures include the non-payment of interest to MSME creditors for amounts paid beyond the appointed date and the non-recognition of deferred tax due to management's view that there is no reasonable certainty of future profits. The auditor also noted that rent includes lease rentals for premises where the company does not possess legitimate lease deeds for all locations.