Kanchi Karpooram Limited has disclosed receiving a significant GST demand order from tax authorities, confirming liabilities totaling over Rs 90 lakh including penalties for the period spanning 2019-20 to 2023-24.

GST Order Details

The company received an order dated 27/03/2026 from the Office of the Assistant Commissioner of GST & Central Excise, Maraimalai Nagar Division, Chennai. The order was communicated via email on 27/03/2026 at 7:14 PM.

Nature of GST Compliance Issues

The Assistant Commissioner's order addresses multiple GST compliance matters across several financial years:

• Ineligible Input Tax Credit (ITC) availed during 2019-20 to 2023-24
• ITC not reversed for credit notes issued
• Ineligible ITC availed on rent paid under Reverse Charge Mechanism (RCM) for 2021-22 and 2022-23
• Non-payment of tax for supply of rental services for 2021-22 and 2022-23
• Non-reversal of ITC taken from 2019-20 to 2023-24
• Non-payment of tax on invoices reflected in GSTR-2A for the period 2019-20 to 2023-24

Company's Response and Next Steps

Kanchi Karpooram Limited has indicated that there is no financial impact at this stage. The company is currently evaluating legal advice on the implications of the order and plans to pursue appropriate remedial measures.

Planned Actions:

• Pursue an appeal with Joint/Additional Commissioner (Appeals II)
• Evaluate other legal options against the order
• Make appropriate disclosures in financial statements if required

Regulatory Compliance

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This follows the company's previous communication dated 24/09/2025 regarding ongoing litigations and quarterly updates on legal matters.

The company has provided comprehensive details as required under SEBI regulations, including the nature of communication received, expected financial implications, and actions being taken in response to the GST order.

Kanchi Karpooram Limited, a leading camphor manufacturer, has released its financial results for the second quarter of fiscal year 2026, revealing a mixed performance with declining revenue but improved profit margins.

Revenue and Profit Analysis

The company posted revenue of ₹38.77 crore for Q2 FY26, marking a significant decline of 16.7% from ₹46.53 crore in Q2 FY25. Despite the revenue drop, Kanchi Karpooram managed to increase its net profit to ₹1.87 crore, up from ₹1.16 crore in the same quarter last year.

Segment Performance

Kanchi Karpooram operates in two business segments: Camphor and Real Estate. The financial results show:

The company's primary focus remains on the Camphor segment, which contributed the entire revenue for the quarter.

Balance Sheet Highlights

As of September 30, 2025, Kanchi Karpooram reported:

Inter-company Loan Agreement Amendment

Kanchi Karpooram has amended its inter-company loan agreement with its wholly-owned subsidiary, Kanchi Agro Products Private Limited (KAPPL). Key changes include:

1. Waiver of interest from October 1, 2024, to November 13, 2025.
2. Conversion of the demand loan to an interest-free term loan due on March 31, 2028.

This amendment, while not at arm's length, reflects the company's strategy to support its subsidiary's operations.

Management Commentary

Suresh Shah, Managing Director of Kanchi Karpooram Limited, stated, "While we faced challenges in revenue generation this quarter, our focus on operational efficiency has helped improve our profit margins. The amendment to the inter-company loan agreement with our subsidiary is part of our long-term strategy to strengthen our group's financial position."

Auditor's Review

P. Chandrasekar LLP, the company's statutory auditors, have issued an unmodified opinion on the unaudited financial results for Q2 FY26, providing assurance on the accuracy of the financial statements.

Outlook

The company acknowledges that market-driven fluctuations in camphor prices and input costs may cause variations in revenue and operating results from quarter to quarter. Kanchi Karpooram continues to adapt to these market dynamics while focusing on maintaining profitability.