Southern Magnesium Reports FY26 Results With ₹12.64 Lakh Profit
Southern Magnesium and Chemicals Limited reported audited financial results for FY26 with net profit of ₹12.64 lakh, significantly lower than ₹319.77 lakh in FY25. Revenue from operations declined to ₹335.55 lakh from ₹1,243.49 lakh in the previous fiscal year. The Board approved the results on May 4, 2026, and statutory auditors issued an unmodified opinion.
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Southern Magnesium and Chemicals Limited reported its audited financial results for the quarter and financial year ended March 31, 2026, with the Board of Directors approving the outcomes at a meeting held on May 4, 2026. The company recorded a net profit of ₹12.64 lakh for FY26, a significant decline from ₹319.77 lakh reported in the previous fiscal year. Revenue from operations stood at ₹335.55 lakh, down from ₹1,243.49 lakh in FY25, reflecting challenging market conditions. The earnings per equity share for FY26 stood at ₹0.42, compared to ₹10.66 in the previous year.
Quarterly and Annual Financial Performance
The fourth quarter of FY26 showed a profit of ₹5.87 lakh, compared to a loss of ₹6.91 lakh in the corresponding quarter of the previous year. Quarterly revenue from operations improved to ₹89.86 lakh from ₹81.12 lakh in Q4 FY25. Total income for the quarter reached ₹115.23 lakh, with other income contributing ₹25.37 lakh. The following table presents the key financial metrics for the full year:
| Metric: | FY26 (₹ in Lakhs) | FY25 (₹ in Lakhs) |
|---|---|---|
| Revenue from Operations: | 335.55 | 1,243.49 |
| Other Income: | 63.52 | 56.92 |
| Total Income: | 399.07 | 1,300.41 |
| Cost of Materials Consumed: | 199.28 | 562.94 |
| Changes in Inventories: | 11.15 | 71.48 |
| Employee Benefits Expense: | 82.15 | 132.37 |
| Finance Costs: | 37.95 | 14.71 |
| Depreciation & Amortization: | 3.77 | 6.10 |
| Other Expenses: | 40.91 | 85.55 |
| Total Expenses: | 375.21 | 873.15 |
| Profit Before Tax: | 23.86 | 427.26 |
| Net Profit for the Year: | 12.64 | 319.77 |
| Earnings Per Share (₹): | 0.42 | 10.66 |
Balance Sheet Highlights
The company's balance sheet as of March 31, 2026, showed total assets of ₹1,800.11 lakh, a decrease from ₹1,962.28 lakh in the previous year. Equity share capital remained unchanged at ₹300.00 lakh, while other equity increased to ₹1,004.82 lakh from ₹992.19 lakh. Current liabilities reduced to ₹495.29 lakh from ₹670.09 lakh, primarily due to the settlement of trade payables. Borrowings under current liabilities, however, rose to ₹466.83 lakh from ₹329.46 lakh.
| Balance Sheet Item: | 31.03.2026 (₹ in Lakhs) | 31.03.2025 (₹ in Lakhs) |
|---|---|---|
| Property, Plant & Equipment: | 23.49 | 29.92 |
| Other Financial Assets (Non-Current): | 596.52 | 225.00 |
| Total Non-Current Assets: | 621.25 | 256.15 |
| Inventories: | 814.51 | 971.61 |
| Trade Receivables: | 33.49 | 53.28 |
| Cash & Cash Equivalents: | 1.35 | 1.97 |
| Other Bank Balances: | 305.00 | 612.00 |
| Total Current Assets: | 1,178.86 | 1,706.13 |
| Total Assets: | 1,800.11 | 1,962.28 |
| Equity Share Capital: | 300.00 | 300.00 |
| Other Equity: | 1,004.82 | 992.19 |
| Borrowings (Current): | 466.83 | 329.46 |
| Total Current Liabilities: | 495.29 | 670.09 |
Cash Flow Statement
The cash flow statement for FY26 revealed net cash used in operating activities of ₹468.65 lakh, compared to net cash generated from operating activities of ₹473.27 lakh in the previous year. The operating profit before working capital changes stood at ₹1.88 lakh, against ₹393.93 lakh in FY25. Net cash generated from investing activities stood at ₹368.61 lakh, driven by movement in other bank balances of ₹307.00 lakh and interest received of ₹58.95 lakh. Net cash from financing activities was ₹99.42 lakh, with proceeds from short-term borrowings of ₹137.37 lakh partially offset by interest paid of ₹37.95 lakh. Cash and cash equivalents at the end of FY26 stood at ₹1.35 lakh, slightly lower than ₹1.97 lakh at the end of FY25.
| Cash Flow Item: | FY26 (₹ in Lakhs) | FY25 (₹ in Lakhs) |
|---|---|---|
| Operating Profit before Working Capital Changes: | 1.88 | 393.93 |
| Net Cash from Operating Activities: | (468.65) | 473.27 |
| Net Cash from Investing Activities: | 368.61 | (545.30) |
| Net Cash from Financing Activities: | 99.42 | 70.08 |
| Net Change in Cash & Equivalents: | (0.62) | (1.96) |
| Closing Cash & Cash Equivalents: | 1.35 | 1.97 |
Key Appointments and Auditor Report
The Board appointed M/s. D. Hanumanta Raju & Co., Company Secretaries, as secretarial auditors and M/s. K. S. Rao & Co., Chartered Accountants (Firm Registration No. 003109S) as internal auditors for the financial year 2026-27. Both firms were appointed at the Board meeting held on May 4, 2026. M/s. Brahmayya & Co., Chartered Accountants (Firm Registration No. 000513S), the statutory auditors, issued an unmodified opinion on the audited financial results for FY26, confirming compliance with Regulation 33 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The results were reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on May 4, 2026. The company's business activity falls within a single business segment, magnesium, as per IND AS 108 on operating segments.
| Appointment Details: | Information |
|---|---|
| Secretarial Auditors (FY26-27): | M/s. D. Hanumanta Raju & Co., Company Secretaries |
| Internal Auditors (FY26-27): | M/s. K. S. Rao & Co., Chartered Accountants (Firm Reg. No. 003109S) |
| Statutory Auditors: | M/s. Brahmayya & Co., Chartered Accountants (Firm Reg. No. 000513S) |
| Auditor Opinion: | Unmodified |
| Board Meeting Date: | May 4, 2026 |
Historical Stock Returns for Southern Magnesium & Chemicals
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.59% | +0.57% | +28.68% | -28.86% | -35.92% | +563.88% |
What strategic measures is Southern Magnesium and Chemicals planning to reverse the ~73% revenue decline and restore profitability to FY25 levels in the coming fiscal year?
How does the significant rise in short-term borrowings (from ₹329.46 lakh to ₹466.83 lakh) alongside negative operating cash flow impact the company's ability to service debt and sustain operations in FY27?
Given the sharp drop in inventory from ₹971.61 lakh to ₹814.51 lakh, what does this signal about future production capacity and demand outlook in the magnesium sector?
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