Sri Nachammai Cotton Mills FY26 Results: Net loss widens to ₹382 lakh
- Net loss widened 18.5% YoY to ₹382.34 lakh for FY26
- Revenue fell 6.7% to ₹6,452.91 lakh amid weak demand
- Exceptional items provided a ₹658.88 lakh gain
- Current borrowings surged to ₹2,310.94 lakh
*this image is generated using AI for illustrative purposes only.
Sri Nachammai Cotton Mills reported a net loss of ₹382.34 lakh for the fiscal year ended March 31, 2026 (FY26), widening from a loss of ₹322.99 lakh in FY25. The company's revenue from operations fell 6.7% to ₹6,452.91 lakh, driven by soft global demand and severe raw material price volatility in the spinning sector.
Financial Performance
The company generated total income of ₹6,477.29 lakh against total expenses of ₹7,170.83 lakh. Profit before exceptional items and tax stood at a loss of ₹693.54 lakh, compared to a loss of ₹402.91 lakh in the previous year. However, exceptional items contributed a gain of ₹658.88 lakh, narrowing the pre-tax loss to ₹34.66 lakh.
After accounting for income tax expenses—including a deferred tax credit of ₹272.53 lakh—the net loss after tax was ₹379.75 lakh. Total comprehensive income for the year recorded a loss of ₹382.34 lakh.
| Metric | FY26 (₹ lakh) | FY25 (₹ lakh) | Change |
|---|---|---|---|
| Revenue from Operations | 6,452.91 | 6,917.34 | -6.7% |
| Net Loss After Tax | (379.75) | (320.50) | +18.5% |
| Total Comprehensive Loss | (382.34) | (322.99) | +18.4% |
Operational Challenges
The management discussion highlighted that FY26 was challenging due to high import reliance for cotton and fluctuating prices that stalled yarn demand. Mills faced pressure from weak global sentiment, forcing discounts in the South Indian yarn market. High cotton prices earlier in the season dampened downstream garment orders.
What the Numbers Show
A significant divergence exists between operational performance and financing costs. While finance costs decreased slightly to ₹354.83 lakh from ₹371.23 lakh in FY25, depreciation rose to ₹227.96 lakh from ₹191.48 lakh. This increase in non-cash charges reflects the company's capital expenditure on plant modernization, including solar power generation, which added to the fixed cost burden during a period of declining top-line growth.
Balance Sheet Signals
Total assets remained relatively stable at ₹9,374.44 lakh, down marginally from ₹9,389.53 lakh. However, the debt structure shifted: current borrowings increased significantly to ₹2,310.94 lakh from ₹1,421.13 lakh, while non-current borrowings fell to ₹2,582.03 lakh from ₹3,142.00 lakh. This suggests a reliance on short-term funding to manage working capital requirements amidst inventory fluctuations.
Corporate Governance and AGM
The 46th Annual General Meeting is scheduled for September 25, 2026, via video conferencing. Shareholders will consider the re-appointment of director Smt C.Renuka and ratify the remuneration of Cost Auditor CMA B.Venkateswar for FY27. No dividend was declared due to inadequacy of profits.
Historical Stock Returns for Sri Nachammai Cotton Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.77% | -1.92% | 0.0% | -15.28% | -22.14% | -33.33% |
How will the company's increased reliance on short-term borrowings impact its interest coverage ratio and liquidity position in FY27?
What specific hedging strategies or supply chain adjustments is management implementing to mitigate future cotton price volatility?
Will the capital expenditure on plant modernization and solar power generation yield sufficient operational efficiency gains to offset rising depreciation costs in the coming fiscal year?
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