Rathi Bars reported a net loss of ₹115.2 crore for the financial year ended March 31, 2026, reversing a net profit of ₹25.7 crore in the prior year. Revenue from operations contracted 25% to ₹3,686 crore, driven by temporary manufacturing suspensions and regulatory pressures.

The company faced significant operational headwinds during the fourth quarter, including income tax search proceedings, GRAP Stage IV restrictions in the NCR region, and an amendment to its Consent to Operate by the Rajasthan State Pollution Control Board. These factors led to a suspension of manufacturing activities, resulting in nil cash flows for the period.

Financial Performance

Revenue from operations declined to ₹3,685.99 crore from ₹4,962.88 crore in FY25. EBITDA turned negative at -₹10.0 crore, compared to a positive ₹147.8 crore in the previous year. The operating loss was exacerbated by finance costs of ₹60.9 crore and depreciation of ₹49.9 crore.

Audit Qualifications and Liquidity Concerns

Statutory auditors Masar & Co. issued a qualified opinion on the standalone financial statements, citing multiple material uncertainties. The report highlighted defaults in servicing cash credit facilities with Axis Bank (₹60.1 crore outstanding) and Yes Bank (₹19.7 crore outstanding). Additionally, the company defaulted on principal and interest payments for an HDFC Bank term loan of ₹4.1 crore since January 2026.

A significant portion of current liabilities includes ₹642.1 crore under TReDS facilities, which remains outstanding and is currently under litigation. The auditors noted that these events cast doubt on the company's ability to continue as a going concern.

What the Numbers Show

The divergence between revenue decline and rising liabilities signals severe liquidity strain. While revenue dropped 25%, trade payables increased to ₹116.1 crore from ₹75.9 crore, and other current liabilities rose to ₹671.1 crore. The provision for bad debts surged to ₹74.8 crore, reflecting uncertainty over the recoverability of ₹945.6 crore in sundry debtors, of which approximately ₹300 crore was disputed during balance confirmations.

Corporate Governance Changes

The Board proposed the appointment of Mr. Sachindra Jha as an Independent Director for a five-year term. Ms. Sonali V Chitalkar will cease to hold office as an Independent Director upon completion of her second consecutive term. The Company Secretary position remained vacant following the resignation of Ms. Bharti Chitkara in March 2026, leading to a procedural qualification in the audit report regarding the signing of financial statements.

Rathi Bars has scheduled its 33rd Annual General Meeting for September 17, 2026. The meeting will address significant governance changes and substantial related-party transaction approvals.

The company is seeking shareholder consent for material related-party transactions totaling up to ₹100 crore each with Rathi Special Steels Limited and Bhiwadi Iron Private Limited for FY27. These transactions involve the sale and purchase of steel products and represent a significant portion of the company's operational scale.

Governance Changes

Shareholders will also consider the appointment of Mr. Sachindra Jha as a Non-Executive Independent Director. Mr. Jha brings over 20 years of experience in the steel industry, including manufacturing operations and supply chain coordination. He will hold office for a five-year term ending on September 17, 2031.

Additionally, the meeting will see the reappointment of Mr. Uddhav Rathi as Whole-time Director, who retires by rotation. The Board has also appointed M/s Avnesh Jain & Co. as Cost Auditors for FY27, with remuneration fixed at ₹25,000 plus applicable taxes.

Related-Party Transaction Details

The proposed transactions with related parties are structured to achieve synergies and economies of scale. Both counterparties share common management with Rathi Bars. The details of these proposals are outlined below:

The explanatory statement notes that these transactions are carried out at arm’s length prices. No external valuation reports were relied upon for these proposals. The Audit Committee of Rathi Bars has unanimously approved and recommended these transactions.

Meeting Logistics

The AGM will be conducted through video conferencing or other audio-visual means. The cut-off date for determining voting eligibility is September 10, 2026. Remote e-voting will be available from September 14 to September 16, 2026. Members holding shares in physical form are advised to dematerialize their holdings, as nearly 100% of the capital is currently held in demat form.