Sarup Industries reported a net profit of ₹56.83 lakh for the financial year ended March 31, 2026, a significant decline from ₹478.88 lakh in FY25. The drop was primarily due to a sharp fall in other income, which fell from ₹419.35 lakh to ₹48.18 lakh, largely because the prior year included a one-time gain from the sale of fixed assets.

Revenue from operations grew marginally by 0.7% to ₹1,608.45 lakh, up from ₹1,597.16 lakh in the previous year. The company did not declare any dividend for FY26 to conserve resources.

Financial Performance

The company's total income decreased to ₹1,656.62 lakh from ₹2,016.51 lakh in FY25. Total expenses rose to ₹1,620.00 lakh from ₹1,557.38 lakh, driven by higher cost of raw materials consumed (₹662.64 lakh vs ₹470.02 lakh) and increased job work charges (₹176.43 lakh vs ₹124.98 lakh).

Finance costs declined to ₹105.43 lakh from ₹135.89 lakh, aiding the debt service coverage ratio, which improved to 1.88 times from 1.04 times in FY25.

Balance Sheet and Operations

Total assets stood at ₹6,254.05 lakh as of March 31, 2026, compared to ₹6,570.71 lakh in FY25. Borrowings increased slightly to ₹3,724.11 lakh (including current liabilities) from ₹3,678.58 lakh. Trade receivables decreased to ₹715.57 lakh from ₹955.79 lakh, improving the trade receivable turnover ratio to 1.92 times from 1.68 times.

The company continues to face negative equity, with reserves and surplus at -₹565.78 lakh. Inventory levels remained stable at ₹4,533.91 lakh, including ₹1,619.64 lakh for stock-in-trade related to a mall under construction.

Corporate Developments

Sarup Industries held its 47th Annual General Meeting on September 30, 2026. Key resolutions included:

• Re-appointment of Mr. Atamjit Singh Bawa as Director.
• Appointment of Ms. Harnarinder Deep Kaur and Mr. Balwinder Khurana as Independent Directors.

The company recently relaunched the Lotus Bawa brand on a soft-launch basis and is awaiting market response. It is also associated with Shalimar Corp., Lucknow, regarding a shopping mall development project.

What the Numbers Show

The drastic reduction in net profit highlights the company's reliance on non-operating income in FY25. With other income dropping by over 88%, the core operational profitability remains thin, with a net profit margin of just 3.43% in FY26 compared to 23.75% in FY25 when adjusted for the one-time gain. This underscores the need for consistent operational growth to sustain profitability without exceptional items.

Sarup Industries Limited reported a net profit of ₹5.48 lakh for the quarter ended June 30, 2026, marking a significant decline from the ₹11.60 lakh recorded in the corresponding period of FY25. The shoe manufacturer’s revenue from operations fell 16.7% year-on-year to ₹309.86 lakh, down from ₹392.67 lakh in Q1FY26.

The Board of Directors approved the unaudited financial results at its meeting held on August 14, 2026. The figures were reviewed by the Audit Committee and subjected to a limited review by statutory auditors M/s Y.K. Sud & Co.

Financial Performance Overview

The company’s total income stood at ₹327.32 lakh, compared to ₹392.79 lakh in Q1FY25. Despite the decline in core operating revenue, other income saw a substantial increase, rising to ₹17.46 lakh from just ₹0.12 lakh in the prior year quarter. This surge in non-operating income partially cushioned the impact of lower sales on the bottom line.

Expenses for the quarter totaled ₹321.84 lakh, down from ₹381.18 lakh in Q1FY25. Cost of materials consumed decreased to ₹98.67 lakh from ₹156.94 lakh, reflecting lower production volumes aligned with reduced sales. Employee benefit expenses also contracted to ₹86.42 lakh from ₹102.77 lakh. However, finance costs remained relatively stable at ₹27.96 lakh, compared to ₹26.01 lakh in the previous year quarter.

What the Numbers Show

A notable divergence exists between the company’s operational performance and its non-operating income streams. While revenue from operations declined by nearly 17%, other income skyrocketed to ₹17.46 lakh, constituting approximately 53% of the total pre-tax profit of ₹5.48 lakh when combined with the small operating margin. This indicates a heavy reliance on non-core income sources to sustain profitability during a period of contracting top-line growth. The absence of tax expenses in both periods suggests the company is not currently liable for corporate tax, likely due to low taxable income or available losses carried forward.

The company operates in a single segment: manufacturing of shoes and shoe uppers. As of the end of the quarter, promoter holding stood at 74.36%, with no shares pledged. Public shareholding remained unchanged at 25.64%. There were no investor complaints received or pending during the quarter.