Nitco Limited received a dismissal of its writ petition by the Delhi High Court regarding a customs duty interest demand of ₹15.17 crore. The company plans to file a Special Leave Petition (SLP) in the Supreme Court.

The Delhi High Court, in an order dated August 21, 2026, dismissed the petition challenging a final Settlement Order from November 14, 2019. The court observed that the challenge to the Show Cause Notice dated June 18, 2018, on limitation grounds could not be reopened.

Legal Proceedings and Financial Impact

The dispute centers on alleged customs duty liability under the EPCG scheme. The court found no infirmity in the direction for quantifying interest under Clause (e) of Para 51(ii) of the Final Settlement Order. Nitco received the order on August 24, 2026.

The company stated there is no material impact on its operations or other activities. Vivek Talwar, Chairman and Managing Director, signed the disclosure under Regulation 30 of the SEBI Listing Regulations.

Nitco Limited reported a consolidated net loss of ₹10.27 crore for the quarter ended June 30, 2026 (Q1FY27), marking a significant reversal from the net profit of ₹47.53 crore recorded in Q1FY26. The deterioration in profitability was primarily driven by a 22.8% year-on-year decline in standalone revenue from operations, which fell to ₹115.50 lakh from ₹149.69 lakh. This drop reflects the cessation of real estate-related income, which had contributed ₹58.42 lakh in the prior year’s corresponding quarter due to a Joint Development Agreement (JDA) advance. The Board of Directors approved the unaudited standalone and consolidated financial results on August 12, 2026, alongside a strategic buyer finance agreement worth approximately ₹2,000 crore with Desiderata Impact Ventures Private Limited (Progcap) for debtor bill discounting.

The financial performance indicates pressure on the core tiles business, which now constitutes the entirety of operational revenue. While total expenses decreased marginally to ₹128.84 lakh (consolidated) from ₹106.23 lakh in Q1FY26, the reduction did not offset the revenue contraction. Statutory Auditors M/s M M Nissim & Co LLP issued a limited review report on the results, highlighting several emphasis of matters including pending regulatory penalties and property monetization deals. The company also appointed Mr. R. K. Bhandari of M/s R. K. Bhandari and Co. as its Cost Auditor for FY26-27.

Financial Performance Overview

The following table outlines the key financial metrics for Nitco Limited for Q1FY27 compared to Q1FY26:

Standalone revenue from operations stood at ₹115.50 lakh, comprising ₹114.22 lakh from tile sales and ₹1.27 lakh from other operational revenue. In contrast, the previous quarter saw ₹149.69 lakh in revenue, heavily bolstered by ₹58.42 lakh from real estate activities. The consolidated revenue mirrored this trend at ₹116.01 lakh. The absence of this one-time real estate income has exposed the underlying weakness in the recurring tile business, which generated ₹114.22 lakh against ₹90.70 lakh in Q1FY26, showing modest growth but insufficient to compensate for the lost real estate gains.

Key Developments and Disclosures

Beyond the financial results, the Board approved several strategic and compliance-related actions. A buyer finance agreement was executed with Progcap for debtor bill discounting, providing access to approximately ₹2,000 crore for FY26-27. This facility aims to enhance liquidity without altering the capital structure, as the agreement contains no special rights such as director appointments or share subscription preferences.

The auditors’ report drew attention to several material matters:

• Regulatory Penalty: The Additional Directorate General Foreign Trade (ADGFT) levied a penalty of ₹170 crore for alleged irregularities in export obligations. The Appellate Bench of DGFT confirmed this penalty. However, management has not provided for this amount in the books, citing legal opinions that the order is bad in law. A Writ Petition is pending before the Bombay High Court.
• Property Monetization: Shareholders approved the monetization of the Kanjurmarg property, held as inventory, for a monetary consideration of ₹143 crore and additional office space. An advance of ₹143 crore has been received, but the sale has not been recognized in the books pending a definitive agreement.
• ESOP Expense: The company recognized an Employee Stock Option Plan (ESOP) expense of ₹10.58 lakh for the vesting period from August 2024 to June 2026, based on a fair value of ₹113.76 per option.

What the Numbers Show

The divergence between the current quarter’s loss and the prior year’s profit underscores Nitco’s reliance on non-recurring real estate transactions for profitability in FY26. With real estate income now absent, the core tiles segment must carry the entire profit burden. Although tile sales rose 25.9% year-on-year (from ₹90.70 lakh to ₹114.22 lakh), this growth was not enough to offset higher employee benefit expenses and depreciation. The segment result for tiles remained negative at ₹(7.47) lakh (standalone), indicating that operational margins are still under pressure despite top-line growth. The upcoming recognition of the Kanjurmarg property sale could provide a significant future boost, but until then, the financials reflect a challenging transition period for the group.