Kakatiya Textiles reported a net loss of ₹502.23 lakh for the financial year ended March 31, 2026, a sharp reversal from the net profit of ₹133.52 lakh recorded in FY25. The company’s revenue from operations declined 6.7% year-on-year to ₹3,144.84 lakh, driven by lower other operating revenue despite stable product sales.

Financial Performance

The company’s operating performance deteriorated significantly, with profit before interest, depreciation, and tax (PBDIT) turning negative at (₹420.50 lakh) compared to a positive ₹188.06 lakh in the previous year. This decline was primarily attributed to a surge in operating expenses. Other expenses more than doubled to ₹1,196.94 lakh from ₹532.33 lakh in FY25, largely driven by higher power and fuel costs (₹578.88 lakh vs ₹262.21 lakh) and increased repairs and maintenance charges (₹316.59 lakh vs ₹135.55 lakh).

Despite the operational loss, the company recognized ₹153.42 lakh in exceptional items, comprising a ₹103.00 lakh waiver on power surcharges and interest, and a ₹50.00 lakh gain from the sale of old machinery. Without these non-recurring gains, the net loss would have been wider.

Balance Sheet Signals

The company’s balance sheet reflects a significant increase in leverage. Non-current borrowings surged 102.7% to ₹4,122.50 lakh from ₹2,033.50 lakh in FY25. This rise was driven by an increase in unsecured inter-corporate loans to related parties, which grew to ₹3,410.20 lakh from ₹1,321.20 lakh. Consequently, the company’s net worth deteriorated to (₹1,785.54 lakh) from (₹1,286.42 lakh), indicating deepening accumulated losses.

Cash flow from operating activities turned negative at (₹2,299.49 lakh), compared to a positive ₹766.65 lakh in the prior year. This outflow was primarily due to a sharp decline in other current liabilities (₹1,478.88 lakh decrease) and increased inventory holdings (₹335.97 lakh increase). To bridge this gap, the company raised ₹2,089.00 lakh through borrowings during the year.

What the Numbers Show

A critical divergence exists between the company’s revenue generation and its cost structure. While revenue declined modestly by 6.7%, operating expenses nearly doubled, with power and fuel costs alone increasing by over 120%. This suggests significant pressure on operational efficiency or underutilization of capacity, as fixed energy costs rose disproportionately to output. Additionally, the reliance on related-party debt has doubled, raising questions about capital structure sustainability given the negative equity position.

Corporate Actions

The Board did not recommend any dividend for FY26. The company’s 44th Annual General Meeting is scheduled for September 29, 2026, where shareholders will consider the re-appointment of Chairperson Ravali Vanka, who retires by rotation. Statutory auditors Brahmayya & Co. have issued an unmodified opinion on the financial statements.

Kakatiya Textiles Limited reported a net loss of ₹502 lakh for the financial year ended March 31, 2026, compared to a net profit of ₹133 lakh in the previous year. The company's revenue from operations for FY26 stood at ₹3145 lakh, down from ₹3371 lakh in FY25. For the quarter ended March 31, 2026, the company recorded a net loss of ₹157 lakh on a revenue of ₹1199 lakh. The Board approved the audited financial results for the fourth quarter and financial year ended March 31, 2026, during a meeting held on May 30, 2026.

Financial Performance

The company's total expenses for FY26 increased to ₹3807 lakh from ₹3245 lakh in the previous year. Key expense drivers included the cost of material consumed at ₹1772 lakh and power and fuel costs at ₹579 lakh. The company reported exceptional items of ₹153 lakh for the year, primarily comprising a surcharge and interest waiver on power charges amounting to ₹103 lakh for the quarter ended March 31, 2026, and ₹50 lakh for the year ended March 31, 2026 related to the profit on the sale of old machinery.

Balance Sheet and Cash Flows

The total assets of the company as of March 31, 2026, were ₹4146 lakh, while total equity and liabilities stood at ₹4146 lakh. The company reported negative reserves of ₹2364 lakh. Borrowings increased significantly to ₹3623 lakh from ₹1534 lakh in the previous year. Cash and cash equivalents improved to ₹70 lakh from ₹36 lakh at the end of the previous year. Net cash generated from operating activities was negative at ₹2299 lakh, while the company raised ₹2089 lakh from borrowings during the year.

Management Changes

The Board took note of the resignation of Mr. Hari Obula Reddy Velicherla as Chief Financial Officer and Mr. Siva Prasad Vank as Manager, effective May 30, 2026. Consequently, the Board appointed Mr. Atmakuri Rama Guravaiah as the new Chief Financial Officer and Mr. Bandlamudi Sunil Babu as Manager, effective from the same date. Mr. Atmakuri Rama Guravaiah brings over 15 years of experience in accounts and finance, while Mr. Bandlamudi Sunil Babu has 20 years of experience in the spinning industry.

Auditor and Regulatory Compliance

The Statutory Auditors, M/s. Brahmayya & Co., Chartered Accountants, issued an unmodified opinion on the audited financial results. The financial results were reviewed by the Audit Committee and approved by the Board of Directors. The company also submitted a declaration pursuant to SEBI circular no. CIR/CFI/CMD/56/2016 dated May 27, 2016, confirming the unmodified opinion.

Key Financial Metrics for FY26