Bihar Sponge Iron Limited (BSIL) has reported a net profit of Rs 386.48 crore for the quarter ended September 30, showcasing the company's financial resilience amid ongoing challenges. The company's performance, however, reflects a decline from the Rs 514.67 crore profit recorded in the same period last year.

Financial Performance

BSIL's financial results for Q2 paint a mixed picture:

Despite a marginal increase in total income, the company faced a significant drop in net profit, indicating potential challenges in maintaining profitability.

Operational Highlights

The company's Board of Directors has approved plans to install and maintain a Waste Heat Recovery Plant. This decision aligns with the consent to operate granted by the Jharkhand State Pollution Board, potentially improving BSIL's energy efficiency and environmental compliance.

Legal and Financial Challenges

BSIL continues to face several legal and financial hurdles:

1. The company is contesting a Rs 215.28 lakh penalty imposed by South East Coalfields Ltd (SECL) for short lifting of coal. After an unfavorable High Court decision, BSIL may pursue alternative legal remedies.

2. BSIL is in discussions with its promoters for a one-time settlement of loans, following a similar approach taken with the Government of Jharkhand for soft loans.

3. The company has fully repaid the principal amount of a soft loan from the Government of Jharkhand and is seeking a waiver of interest amounting to Rs 11,446.11 lakh. Currently, only Rs 2,746.19 lakh of interest has been provided for in the books.

Auditor's Observations

The company's auditors, Doogar & Associates, have issued a qualified review report, highlighting concerns about unprovided penalties and loan settlement matters with promoter companies. These qualifications underscore the ongoing financial complexities faced by BSIL.

Looking Ahead

As Bihar Sponge Iron navigates through its financial and legal challenges, the planned installation of the Waste Heat Recovery Plant may represent a strategic move towards operational efficiency. However, the resolution of pending legal issues and loan settlements will likely play a crucial role in the company's future financial stability and growth prospects.

Bihar Sponge Iron Limited (BSIL) has faced a setback in its legal battle against South Eastern Coal Fields Ltd. (SECL) as the Chhattisgarh High Court dismissed the company's writ petition on October 27, 2025. The dispute centers around a penalty of Rs. 215.28 lacs imposed by SECL for short lifting of coal quantity under a Fuel Supply Agreement (FSA) from the fiscal year 2011-12.

Legal Proceedings and Attempts at Resolution

The legal journey for BSIL has been ongoing, with several key developments:

1. The Chhattisgarh High Court had previously directed both parties to appear before SECL's General Manager (Marketing & Sales) on April 21, 2025, with the aim of reaching a mutual settlement within 60 days.
2. Following an unsuccessful meeting at SECL's office, where BSIL's concerns were not addressed to their satisfaction, the company decided to pursue further legal action.
3. BSIL filed a new writ petition (WPC/24721 of 2025) against SECL's order/decision.
4. This latest petition was dismissed by the Chhattisgarh High Court on October 27, 2025.

Financial Implications and Company Response

Despite the court's decision, BSIL maintains that the financial impact of this ruling will not be material, considering the size of the company's operations. The company has stated that it is consulting with its legal advisors to determine the appropriate next steps in response to this development.

Upcoming Board Meeting

In a separate announcement, BSIL has informed that its Board of Directors is scheduled to meet on November 12, 2025, to consider and approve the un-audited financial results for the second quarter and half-year ended September 30, 2025. As per regulatory requirements, the trading window for the company's shares will remain closed for insiders until 48 hours after the declaration of these financial results.

Conclusion

The dismissal of BSIL's writ petition marks a significant point in the ongoing dispute with SECL. While the company downplays the financial impact, the legal setback may have implications for its operations and relationships with coal suppliers. Investors and industry observers will likely be watching closely for any further developments in this matter, as well as the upcoming financial results, to gauge the overall health and direction of Bihar Sponge Iron Limited.