SEL Manufacturing Company Limited reported a net loss of ₹4,199.50 lakhs for the quarter ended June 30, 2026 (Q1FY27), marking a slight deterioration from the ₹4,104.62 lakhs loss recorded in Q1FY26. Revenue from operations plummeted by 47.6% year-on-year to ₹301.09 lakhs, down from ₹575.07 lakhs in the corresponding period of the previous fiscal year. The financial results, approved by the Board on August 6, 2026, highlight severe operational constraints, with the company unable to fully utilize its manufacturing capacities due to ongoing liquidity stress.

The Board also approved the Board’s Report and Corporate Governance Report for FY26 and scheduled the 26th Annual General Meeting for September 30, 2026, to be held via Video Conferencing / Other Audio Visual Means. The unaudited financial results were reviewed by independent auditor Kamboj Malhotra & Associates, who issued a qualified opinion citing the absence of impairment testing for Property, Plant & Equipment and Capital Work in Progress as required under Ind AS 36.

Financial Performance Snapshot

Finance costs remained a significant burden at ₹1,940.89 lakhs for the quarter, while depreciation expenses stood at ₹2,076.61 lakhs. Other income declined sharply to ₹2.73 lakhs from ₹13.86 lakhs in the preceding quarter. The company incurred exceptional items amounting to ₹0.82 lakhs. Total comprehensive income for the period was a loss of ₹4,821.33 lakhs.

What the Numbers Show

The divergence between declining revenue and persistent high fixed costs underscores the structural challenges facing SEL Manufacturing. With major plants shut down for the majority of the period, the company relied heavily on job work activities to generate limited revenue. This operational deficit is exacerbated by an inability to infuse the stipulated working capital; under the approved resolution plan, the company was required to bring ₹6,500 lakhs but infused only ₹2,500 lakhs. Consequently, cumulative losses have reached ₹85,077 lakhs till date.

Material Uncertainties and Compliance Issues

The auditor highlighted a material uncertainty related to the company’s ability to continue as a going concern. Key issues include:

• Unpaid Dues: The company has defaulted on quarterly installments due from September 30, 2023, to June 30, 2026, amounting to ₹36,098.41 lakhs. Additionally, monthly interest and other charges due from July 2023 to June 2026, totaling ₹21,249.96 lakhs, remain unpaid.
• Legal Moratorium: An interim ex parte order dated August 16, 2023, by the National Company Law Tribunal (NCLT), Chandigarh Bench, grants a complete moratorium on payments to banks until the next hearing date.
• Listing Fees: Outstanding listing fees of ₹5.85 lakhs for FY26 and FY27 remain unpaid as of the approval date.
• Insolvency Risk: Shareholders had previously passed a resolution in October 2023 regarding the initiation of the Corporate Insolvency Resolution Process under Section 10 of the Insolvency and Bankruptcy Code, 2016, if necessary.

The company has filed applications before the NCLT concerning the non-declassification of the company from defaulter lists by banks and financial institutions, as mandated within 30 days of the resolution plan’s effective date.

SEL Manufacturing Company Limited reported a net loss of ₹4,186 lakh for the quarter ended March 31, 2026, as total income from operations declined to ₹245.51 lakh. For the financial year ended March 31, 2026, the company recorded a net loss of ₹16,787.23 lakh on a total income of ₹1,564.65 lakh. The results were taken on record by the Board of Directors at its meeting held on May 28, 2026.

Financial Performance

The company’s expenses for the quarter stood at ₹4,667.51 lakh, significantly higher than its income, leading to a loss before tax of ₹4,186 lakh. For the full year, total expenses reached ₹18,907.78 lakh. The basic and diluted earnings per share (EPS) for the year were reported at (₹50.66).

Auditor’s Observations

Kamboj Malhotra & Associates, the statutory auditors, issued a qualified opinion on the financial results. The qualification arises because the company did not conduct impairment testing for Property, Plant & Equipment and Capital Work in Progress as required by Ind AS 36, citing financial constraints. Consequently, the potential impact of impairment on the financial statements could not be ascertained.

Material Uncertainty and Going Concern

The auditors highlighted a material uncertainty that casts significant doubt on the company’s ability to continue as a going concern. The company has incurred continuous losses since the implementation of its resolution plan in 2020-21, with cumulative losses totaling ₹80,878 lakh over the last five years. The current ratio deteriorated to 0.02:1 as of March 31, 2026, from 0.04:1 in the previous year, reflecting severe liquidity stress.

Operational Challenges and Defaults

SEL Manufacturing defaulted on a quarterly installment of ₹30,871.91 lakh due from September 30, 2023, to March 31, 2026, and failed to pay monthly interest and other charges amounting to ₹19,342.64 lakh for the period from July 2023 to March 2026. The company’s major plants remained shut for the majority of the year, and operations were sustained primarily through job work activities. The National Company Law Tribunal (NCLT), Chandigarh Bench, has granted a moratorium on payments until the next hearing.