Rachana Infrastructure Limited has reported a significant improvement in its standalone financial performance for the year ended March 31, 2026, with net profit more than doubling year-on-year. The Board of Directors, at their meeting held on May 30, 2026, reviewed and approved the audited standalone financial results pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The statutory audit was conducted by M/S. B.J Patel and J.L Shah, Chartered Accountants (FRN: 104148W), who issued an unmodified/unqualified audit opinion on the annual results.

Financial Performance: Strong Revenue and Profit Growth

The company recorded robust growth across key financial metrics for FY 2025-26. Revenue from operations rose sharply to ₹13,794.94 lakhs from ₹9,415.74 lakhs in the prior year. Total revenue for the year stood at ₹14,051.88 lakhs, compared to ₹9,686.73 lakhs previously. Net profit climbed to ₹1,012.72 lakhs from ₹410.33 lakhs, reflecting strong operational leverage. The following table summarises the key financial results:

Balance Sheet and Cash Flow Highlights

The company's total assets stood at ₹12,636.03 lakhs as at March 31, 2026, compared to ₹12,159.83 lakhs in the prior year. Shareholders' funds comprised share capital of ₹1,860.50 lakhs and reserves and surplus of ₹8,943.21 lakhs. Cash and cash equivalents improved significantly to ₹811.60 lakhs from ₹395.16 lakhs. Net cash generated from operating activities for FY 2025-26 was ₹979.30 lakhs, a marked turnaround from a net utilisation of ₹48.61 lakhs in the prior year. Trade receivables increased to ₹3,136.47 lakhs from ₹2,328.55 lakhs, while long-term borrowings declined to ₹198.01 lakhs from ₹615.72 lakhs.

Segment Performance

The company is primarily engaged in Infrastructure Projects and Quarry Mining. The management noted that trading as a separate segment no longer holds significance considering the quantum of business operations, and has accordingly excluded it from segment reporting from the current year onwards. Segment-wise performance for the half year ended March 31, 2026 is as follows:

Board Decisions: Auditor Appointments and Key Corporate Actions

At the Board meeting held on May 30, 2026, the following key decisions were taken in addition to the approval of financial results:

• Secretarial Auditor: M/s. Mukesh H. Shah & Co., Company Secretaries, Ahmedabad, appointed as Secretarial Auditors for FY 2026-27. The firm is led by Mr. Mukesh Himatlal Shah (M.No.: 5827) with more than 20 years of experience in Corporate Laws, FEMA, Securities Law, and related areas, and holds a Peer Review Certificate with CoP No.: 2213.
• Cost Auditor: M/s. Dalwadi and Associates, Cost Accountants, appointed as Cost Auditors for FY 2026-27. The firm is led by CMA Ashwin G. Dalwadi with more than five decades of experience in Cost and Management Accountancy across diversified industries.
• Company Secretary Resignation: The Board accepted the resignation of Ms. Himali Maheshbhai Thakkar as Company Secretary and Compliance Officer, effective from the close of business hours on June 25, 2026. The resignation was tendered on personal grounds.

Contingent Liabilities and Auditor Emphasis of Matter

The company's total contingent liabilities as at March 31, 2026 stood at ₹5,360.333 lakhs, compared to ₹5,046.263 lakhs as at March 31, 2025. Key items include guarantees to banks and financial institutions of ₹2,323.06 lakhs, GST-related demands for Maharashtra (FY 2019-20 and FY 2020-21) of ₹2,339.90 lakhs, and Geology and Mining Department demands of ₹165.80 lakhs. The statutory auditors drew attention to an advance given for a joint venture land acquisition where partial recovery is pending, with the company deciding to file a civil suit for recovery. The auditors also noted an Administrative Warning letter dated May 19, 2026 issued by SEBI for non-compliance with Regulation 245(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, relating to incorrect reporting of the Order Book in the prospectus dated May 09, 2022. The audit opinion was not modified in respect of these matters.

The following table presents the detailed contingent liabilities breakdown:

Rachana Infrastructure Limited has received an administrative warning letter from the Securities and Exchange Board of India (SEBI) concerning observations made on the disclosures in its prospectus for the SME IPO. The letter, dated May 19, 2026, was issued by the Deputy General Manager of the Corporation Finance Department, citing non-compliance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The regulatory examination of the SME IPO revealed a specific discrepancy regarding the order book value disclosed in the prospectus dated May 09, 2022. The document stated the value of a construction project for a four-lane divided carriageway on NH-68 in Gujarat as Rs 140 crores, representing 19% of the total contract value. However, SEBI observed that as per the Joint Venture Agreement, only 5% of the contract value was actually allocated to the company.

Regulatory Observations

SEBI determined that the offer document did not contain true and adequate disclosures with respect to the order book value. This failure was deemed a violation of Regulation 245 (1) of the ICDR Regulations. The regulator has viewed this violation seriously and has issued a formal warning to the entity.

Compliance and Future Directions

The market regulator has advised rachana infrastructure to be careful in future operations and to improve its compliance standards. SEBI warned that recurrence of such instances could lead to appropriate enforcement action in accordance with the law. The company has been directed to disclose this letter to the recognized stock exchanges in terms of the LODR Regulations, 2015 and place it before its Board in the next meeting.