Zenlabs Ethica board of directors convened on September 2, 2026, to approve the convening of its 33rd Annual General Meeting (AGM) and recommend the re-appointment of its statutory auditors.

The board scheduled the AGM for Tuesday, September 29, 2026, at 12:00 pm at the company’s registered office in Chandigarh. Shareholders will be able to cast their votes via remote e-voting from September 26 to September 28, 2026. The cut-off date for determining voting rights is set for September 22, 2026.

Auditor Re-Appointment

The directors recommended the re-appointment of M/s N Kumar Chabbra & Co., Chartered Accountants, as the statutory auditor for a term of five years. This appointment is subject to shareholder approval at the upcoming AGM. The firm holds a valid Peer Review Certificate and has confirmed eligibility under the Companies Act, 2013, and SEBI LODR Regulations.

Corporate Governance Updates

The board also approved the Board’s Report for the financial year ended March 31, 2026. Additionally, the directors proposed an amendment to the object clause of the Memorandum of Association, which requires shareholder approval at the AGM. The amendment aims to broaden operational flexibility regarding foreign currency repatriation, contract execution, and asset management.

Mrs. Nitika Goel of BND & Associates was appointed as the scrutinizer for the e-voting process.

Zenlabs Ethica reported a significant expansion in revenue for the quarter ended June 30, 2026, but faced pressure on its bottom line, resulting in a widened net loss.

The pharmaceutical trading firm logged revenue from operations at ₹1,417.7 crore, marking a 23.5% increase from ₹1,147.7 crore in Q1FY25. This represents a strong sequential recovery as well, rising 34% from ₹1,058.4 crore in the immediately preceding quarter (Q4FY25).

Despite the robust topline performance, profitability deteriorated sharply. The company recorded a net loss of ₹57.1 crore for the quarter, a stark contrast to the net profit of ₹3.3 crore reported in Q1FY25. In the previous quarter (Q4FY25), the company had posted a marginal net profit of ₹0.1 crore.

Operational Expenses and Margin Pressure

Total expenses surged to ₹1,473.3 crore in Q1FY26, up from ₹1,143.7 crore in the same period last year. The rise in costs outpaced revenue growth, leading to a pre-tax loss of ₹55.6 crore.

Key expense drivers included:

• Purchase of stock-in-trade: ₹877.5 crore (down from ₹1,012.3 crore YoY)
• Increase in stock-in-trade: ₹475.9 crore (compared to a decrease of ₹183.0 crore YoY)
• Employee benefit expenses: ₹45.2 crore (down significantly from ₹104.1 crore YoY)
• Other expenditure: ₹48.1 crore (down from ₹160.1 crore YoY)

The substantial increase in inventory levels (stock-in-trade) appears to be a primary factor contributing to the higher total expenditure and the resulting loss, despite lower purchase costs and employee benefits compared to the prior year.

What the Numbers Show

The divergence between revenue growth and profitability is driven by working capital dynamics rather than operational inefficiencies in core costs. While revenue grew 23.5% YoY, employee benefits and other expenditures fell significantly. However, the ₹475.9 crore increase in stock-in-trade in Q1FY26, compared to a decrease of ₹183.0 crore in Q1FY25, indicates a heavy build-up of inventory. This inventory accumulation, treated as an expense in the cost of goods sold calculation, directly impacted the bottom line, turning a profitable quarter into a loss-making one despite lower direct purchase and operational costs.

Auditor Review and Compliance

The unaudited financial results were reviewed by N Kumar Chhabra and Co., Chartered Accountants, who expressed no material misstatements. The Board of Directors approved the results on August 12, 2026, in compliance with SEBI LODR regulations. The company operates as a single segment entity engaged in pharmaceutical formulation trading.