Nilachal Refractories Limited reported a net loss of ₹313.84 lakh for the quarter ended June 30, 2026, marking a significant widening from the ₹42.10 lakh loss recorded in the same period of FY25. The company’s financial performance was heavily impacted by non-recurring charges related to the winding down of its manufacturing business, which has been classified as discontinued operations.

Discontinued Operations Drive Losses

The primary driver of the quarterly loss was the remeasurement of assets held for sale. Following shareholder approval in May 2026 to sell the undertaking, the company classified its property, plant, and equipment as assets held for sale under Ind AS 105. Subsequent agreements with vendors led to a recognition of a ₹183.62 lakh loss on the measurement of the disposal group to fair value less cost to sell.

Additionally, the company recognized a ₹59.72 lakh write-down of inventories associated with the discontinued operations. These items combined resulted in a post-tax loss from discontinued operations of ₹258.38 lakh for the quarter, compared to a profit of ₹11.37 lakh in the preceding quarter ended March 31, 2026.

Continuing Operations Remain Under Pressure

From continuing operations, the company posted a loss before tax of ₹52.99 lakh, up from a loss of ₹36.36 lakh in Q1FY25. Total income from continuing operations stood at ₹15.23 lakh, comprising entirely of other income as revenue from operations remained nil. This contrasts with total expenses of ₹68.22 lakh, which included employee benefits of ₹3.74 lakh and finance costs of ₹20.92 lakh.

What the Numbers Show

The financial data reveals a stark divergence between operating income and expense structure in continuing operations. While other income surged to ₹15.23 lakh from ₹1.56 lakh year-on-year, it was insufficient to cover finance costs alone, which more than doubled to ₹20.92 lakh. This indicates that despite the cessation of revenue-generating activities, the cost of capital remains a significant drag on the balance sheet, contributing to the persistent operational losses even before accounting for the massive asset write-downs in discontinued segments.

Delisting Process Ongoing

Nilachal Refractories is currently in the process of delisting its equity shares from the BSE and CSE pursuant to an Open Offer-cum-Delisting Offer made by an acquirer. The acquisition and delisting are being conducted in accordance with the Companies Act, 2013, and SEBI (Delisting of Equity Shares) Regulations, 2021. The results were approved by the Board of Directors on June 8, 2026, and considered by the Audit Committee on August 14, 2026.

Nilachal Refractories Limited shareholders have unanimously approved the slump sale of its idle movable fixed assets to Deol Engineers LLP. The Extra-Ordinary General Meeting (EGM), held on August 4, 2026, in Kolkata, resulted in 100% support for the resolution, with no votes cast against the proposal. This approval enables the company to monetize non-operational plant and machinery, aiming to reduce maintenance burdens and strengthen liquidity through liability repayment and working capital enhancement.

The transaction is structured under Section 180(1)(a) of the Companies Act, 2013, requiring shareholder consent for the transfer of substantially the whole of the undertaking’s movable assets. A Memorandum of Understanding (MOU) has already been executed with Deol Engineers LLP, based in Ghaziabad, Uttar Pradesh. The final Business Transfer Agreement will be concluded on an “As Is Where Is,” “As Is What Is,” and “Without Recourse” basis. The Board retains the authority to finalize the consideration through commercial negotiations, provided it does not fall below the ₹5,00,00,000 (₹5 crore) floor established in the notice.

Voting Results and Process

The voting process was conducted via remote e-voting through National Securities Depository Limited (NSDL) and physical polling at the meeting venue. Shareholders holding shares as of the cut-off date, July 28, 2026, were eligible to vote. Rajan Singh & Co., Practicing Company Secretaries, served as the scrutinizer, ensuring compliance with Section 108 of the Companies Act, 2013, and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The e-voting window remained open from August 1, 2026, at 9:00 A.M. until August 3, 2026, at 5:00 P.M. Votes were unblocked on August 4, 2026, at approximately 12:09 P.M., in the presence of two independent witnesses, Mr. Ankush Mukherjee and Mr. Somojyoti Ghosh. The consolidated results indicate that the resolution represents 96.70% of the total share capital of the company.

Strategic Rationale

The explanatory statement highlighted that continued maintenance of idle assets incurs recurring expenditure without commercial benefit. By transferring these assets—comprising plant, machinery, manufacturing equipment, stores, and spares—the company aims to unlock trapped value. Proceeds from the sale are earmarked for liability repayment, working capital enhancement, and general corporate purposes. No directors or key managerial personnel have a financial interest in the resolution beyond their shareholding, ensuring an arm’s length transaction structure.