Covance Softsol , a newly demerged IT/ITES company, has reported a significant increase in standalone revenue for the quarter ended June 30, 2025, despite facing operational challenges and legal disputes.

Financial Highlights

• Standalone revenue surged 585% to ₹1,740.13 lakhs, compared to ₹254.08 lakhs in the same quarter last year.
• Net profit after tax increased by 4,884% to ₹828.27 lakhs.
• Consolidated revenue grew 43% to ₹3,327.77 lakhs.
• Consolidated net profit, however, declined 18% to ₹777.82 lakhs.

Business Operations and Challenges

Covance Softsol, formed through a demerger from Softsol India Limited in 2024, disclosed that its customer contracts with BSNL for providing SMS services to various banks were fully concluded during the previous financial year. These contracts have not been renewed, resulting in no active business operations currently.

Despite the lack of ongoing operations, the company reported sufficient cash balances to settle all liabilities as of June 30, 2025, and those estimated to arise in the next twelve months.

Legal Dispute

The company is facing a legal challenge from M/s Mudunuru Limited, which has claimed ₹12.05 crores from Covance Softsol. Management disputes this claim as false and fabricated, asserting that all obligations under the last business arrangement with Mudunuru, which ended in October 2022, have been fully settled. The company has obtained legal opinion stating that their defense is tenable and likely to succeed in defeating any petition under Section 9 of the IBC by Mudunuru Ltd.

Future Outlook

Management is currently exploring and researching the development of new technological products. This strategic move aims to pivot the company towards new business opportunities in the IT/ITES sector.

Financial Results Publication

In compliance with regulatory requirements, Covance Softsol has published its unaudited Standalone and Consolidated Financial Results for the first quarter ended June 30, 2025, in the following newspapers on August 15, 2025:

• Business Standard (English Daily)
• Nava Telangana (Telugu Daily)

The financial results were approved by the Board of Directors at its meeting held on Thursday, August 14, 2025.

Investors and stakeholders can access the detailed financial results on the BSE Limited's website ( www.bseindia.com ) and the company's website ( www.covance.ai ).

As Covance Softsol navigates through this transitional phase, the company's ability to develop new technological products and resolve its legal challenges will be crucial for its future growth and stability in the competitive IT/ITES sector.

Covance Softsol Limited has announced a crucial board meeting scheduled for August 14, 2025, at its registered office in Hyderabad. The meeting agenda includes several important items that could potentially impact the company's financial trajectory and shareholder interests.

Financial Review

The board will review the unaudited standalone and consolidated financial results for the first quarter ended June 30, 2025. These results will be accompanied by a limited review report, providing investors with insights into the company's performance during the initial months of the fiscal year.

Fund Raising Proposal

In a significant development, the board will consider a proposal for fund raising through a rights issue of equity shares. This move could potentially strengthen Covance Softsol's capital base and provide resources for future growth initiatives. The board will also discuss other modalities related to the proposed rights issue, subject to necessary regulatory approvals.

Regulatory Compliance

The company has made this announcement in compliance with Regulation 29(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This adherence to regulatory standards underscores Covance Softsol's commitment to transparency and corporate governance.

Additional Considerations

The board meeting will also address any other business items with the permission of the Chair, leaving room for potential discussions on additional matters of importance to the company.

Investors and stakeholders will be keenly watching the outcomes of this board meeting, particularly the Q1 financial results and any decisions regarding the proposed rights issue. The results of the meeting could provide valuable insights into Covance Softsol's financial health and future strategies.