Race Eco Chain Limited reported a significant improvement in profitability for the first quarter of FY27, with consolidated net profit rising 150% year-on-year to ₹103.5 lakh. The company’s consolidated revenue from operations grew 22% to ₹19,106.5 lakh in the quarter ended June 30, 2026, compared to ₹15,672.6 lakh in Q1FY26.

The results were driven by strong performance across its core segments, particularly the Recycle Division, which contributed the majority of the top-line growth. Standalone net profit also surged, increasing nearly six-fold to ₹61.0 lakh from ₹10.2 lakh in the corresponding period last year, while standalone revenue dipped slightly by 6% to ₹9,317.5 lakh.

Financial Highlights

On a standalone basis, the company reported revenue of ₹9,317.5 lakh, down from ₹9,881.4 lakh in Q1FY26. However, the bottom line saw a sharp recovery with net profit reaching ₹61.0 lakh, compared to ₹10.2 lakh previously. Finance costs remained a significant expense, totaling ₹246.6 lakh on a consolidated basis, up from ₹165.1 lakh in the prior year quarter.

What the Numbers Show

A key divergence emerged between the company’s operational earnings and its comprehensive income. While net profit rose substantially, total comprehensive income for the consolidated entity was just ₹22.3 lakh, down significantly from ₹195.7 lakh in Q1FY26. This was primarily due to a negative other comprehensive income (OCI) of ₹81.2 lakh, driven by income tax relating to items that will not be reclassified to profit or loss. This suggests that while core operations improved, valuation changes or tax adjustments on investments weighed heavily on overall equity growth.

Board Approvals and Corporate Actions

During its meeting on August 12, 2026, the Board of Directors approved several key administrative and governance decisions:

• Managing Director Re-appointment: The board re-appointed Mr. Sunil Kumar Malik as Managing Director for a three-year term commencing October 2, 2026, subject to shareholder approval. His remuneration remains unchanged from the previous term.
• Statutory Auditor: M/s. Akshay Singhla & Associates, Chartered Accountants, were appointed as Statutory Auditors for a five-year term starting from the conclusion of the 26th AGM.
• Internal Auditor: M/s. Modi Harsh & Co. was appointed as Internal Auditor for the financial year 2026-2027.
• AGM Date: The Annual General Meeting for FY26 is scheduled for September 26, 2026.

The company also noted specific transactions during the period, including the forfeiture of 19.55 lakh convertible warrants due to non-payment of the balance amount and an acquisition of additional equity shares in its subsidiary, Ganesha Recycling Chain Private Limited. Additionally, Ganesha Recycling Chain acquired a 51% stake in Shubhlaxmi Ecoplast LLP, making it a step-down subsidiary.

Race Eco Chain Limited has divested its entire holding in Prime Industries Limited, an entity that contributed significantly to the company’s consolidated income during the previous financial year. The company sold 2,10,000 equity shares, representing approximately 0.99% of Prime Industries’ share capital, for a total consideration of ₹88,53,600. The transaction was entered into on June 30, 2026, with delivery and settlement occurring on July 1, 2026. Consequently, Prime Industries ceased to be an associate company of Race Eco Chain effective July 1, 2026, marking the end of significant influence over the subsidiary.

The disclosure, made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023, clarifies a revision to the effective date of the divestment. While an earlier intimation dated June 30, 2026, indicated the cessation of associate status on that date, the actual settlement occurred on July 1, 2026. Race Eco Chain confirmed that there are no other changes to the earlier disclosure aside from this date correction. The transaction was classified as a related party transaction conducted at arm’s length, though no buyers were identified as belonging to the promoter group or group companies.

Financial Impact and Associate Contribution

Prior to the divestment, Prime Industries represented a material portion of Race Eco Chain’s consolidated financials. During the financial year ended March 31, 2026, the associate contributed 53.58% to the consolidated income, amounting to ₹331.5 lacs. Additionally, Prime Industries accounted for 17.65% of the associate consolidated net worth, valued at ₹1,527.11 lacs as of March 31, 2026. The exit from this associate relationship will remove these contributions from future consolidated reporting periods.

Transaction Details

The sale involved the complete disposal of Race Eco Chain’s equity interest in Prime Industries. The company confirmed that the transaction does not fall under any Scheme of Arrangement and is not a slump sale. The consideration of ₹88,53,600 reflects the market value agreed upon between the parties. With the settlement complete, Race Eco Chain no longer holds any significant influence over Prime Industries’ operations or financial policies. This move simplifies the corporate structure by removing an associate entity that previously held a substantial share of the group’s income and net worth metrics.