Vikas Ecotech Limited reported a standalone net profit of ₹12.72 lakh for the financial year ended March 31, 2026, a significant decline from the net profit of ₹1,428.14 lakh in FY25. For the quarter ended March 31, 2026, the company posted a standalone net loss of ₹109.74 lakh, reversing the net profit of ₹197.59 lakh in the same period of the previous year. Total income for the full year decreased to ₹26,782.87 lakh from ₹29,087.50 lakh in the previous year.

The statutory auditors, KSMC & Associates, issued a qualified opinion on the standalone and consolidated financial results. The report highlighted delays in the deposit of statutory dues and noted that the company continued business and investment activities, including granting inter-corporate deposits, without sufficient audit evidence regarding their business rationale. The auditors were unable to determine the impact of these matters on the financial results.

Auditor’s Key Observations

The auditors identified several material issues affecting the financial statements. The company entered into related party transactions, including inter-corporate deposits and investments, without obtaining requisite shareholder approvals as required by Regulation 23 of the SEBI (LODR) Regulations and Section 188 of the Companies Act, 2013. Additionally, a loan outstanding of ₹18.50 crore lacked sufficient evidence regarding recoverability.

Further, an investment of ₹132.50 crore with M/s BG Technocrats Private Limited was cancelled during the year, with ₹47.00 crore received and a receivable of ₹85.50 crore recognized. Subsequently, ₹42.97 crore was received, leaving a balance of ₹42.53 crore. The auditors stated they could not determine the necessary adjustments due to missing documentation regarding the cancellation and recoverability.

Consolidated Performance and Other Disclosures

On a consolidated basis, the company reported a net profit of ₹313.70 lakh for FY26, down from ₹1,698.37 lakh in FY25. Consolidated total income for the year stood at ₹36,032.64 lakh against ₹38,384.98 lakh in the prior year. For Q4FY26, the consolidated net loss was ₹44.41 lakh compared to a net profit of ₹430.36 lakh in Q4FY25.

The auditors also drew attention to an income tax demand of ₹17.71 crore, which the company is contesting, and a settlement agreement with Hallow Securities Private Limited regarding dues of ₹20.45 crore. The company’s shareholding in its erstwhile wholly-owned subsidiary, Vikas Organics Private Limited, was diluted to 53.19% following a preferential allotment.

Financial Results Summary

Vikas Ecotech reported a standalone net profit of ₹0.13 crore for the financial year ended March 31, 2026, a sharp decline from ₹14.28 crore in the previous year. Revenue from operations fell to ₹261.63 crore from ₹285.82 crore in FY25. The statutory auditors issued a qualified opinion on the financial results, highlighting material uncertainties regarding statutory dues, related party transactions, and the recoverability of specific loans and investments.

Qualified Opinion and Audit Observations

KSMC & Associates, the Statutory Auditors, qualified their opinion due to several material factors. The report noted delays in the deposit of statutory dues while the company continued business and investment activities. Auditors stated they lacked sufficient evidence regarding the business rationale for investments and inter-corporate deposits made during the year. Additionally, the company entered into material related party transactions with promoter group entities and subsidiaries without obtaining requisite shareholder approvals prior to the year-end.

Asset Recovery and Investment Concerns

The auditors flagged an outstanding loan of ₹18.50 crore for which they could not obtain sufficient evidence regarding recoverability, including external balance confirmations or the borrower's financial statements. Furthermore, a Memorandum of Understanding with M/s BG Technocrats Private Limited involving an investment of ₹132.50 crore was cancelled during the year. While the company received ₹47.00 crore and recognized a receivable of ₹85.50 crore, auditors noted a lack of evidence regarding the cancellation agreement and the recoverability of the remaining balance, which stood at ₹42.53 crore subsequent to the balance sheet date.

Real Estate Commitment and Tax Demands

The company committed ₹100.00 crore to a real estate project with Silverline Furnishing and Furnitures Private Limited, advancing ₹55.50 crore as of March 31, 2026. Auditors were unable to obtain evidence regarding the commercial rationale or statutory approvals for the project. Additionally, the company received income tax demand notices aggregating ₹17.71 crore, which it is contesting. No provision has been made for these demands as management believes the likelihood of an outflow is remote.

Financial Performance

For the quarter ended March 31, 2026, the company reported a standalone net loss of ₹1.10 crore, compared to a net profit of ₹1.98 crore in the same period last year. Total income for the quarter stood at ₹83.19 crore. On a consolidated basis, the company reported a net profit of ₹3.14 crore for FY26, down from ₹16.98 crore in the previous year, with total income at ₹360.33 crore.