Deep Polymers Limited has released its unaudited financial results for the third quarter ended December 31, 2025, revealing a challenging performance compared to the same period last year. The Gujarat-based polymer manufacturer reported decreased revenue and profitability, though it maintained positive earnings across its operational segments.

Financial Performance Overview

The company's financial metrics for Q3FY26 showed a mixed performance when compared to the previous year:

The decline in revenue from operations by Rs. 152.01 lakhs reflects challenging market conditions, while the significant drop in net profit of Rs. 55.16 lakhs indicates pressure on operational efficiency and cost management.

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, Deep Polymers showed resilience despite quarterly challenges:

The nine-month figures demonstrate a more moderate decline compared to the quarterly performance, suggesting that Q3FY26 faced particular challenges that impacted the overall trajectory.

Segment-wise Performance

Deep Polymers operates through three main segments, each showing different performance patterns:

The Rakanpur segment, being the largest contributor, experienced a revenue decline but maintained strong profitability. The Santej segment showed reduced revenue but positive results, while Hajipur, despite revenue growth, continued to report losses.

Auditor Qualifications and Concerns

The statutory auditors, S. N. Shah & Associates, issued a qualified opinion highlighting two significant concerns:

Trade Receivables Issue: The company has trade receivables of Rs. 166.72 lakhs under legal recovery proceedings. The auditors believe adequate provision for doubtful debts should have been made, which would have resulted in an overstatement of profit and assets by Rs. 166.72 lakhs.

Foreign Currency Compliance: The company has not restated foreign currency-denominated items as per Ind-AS-21 requirements, leading to potential overstatement or understatement of foreign currency items and consequent impact on profits.

Impact of Audit Qualifications

The audit qualifications significantly affect the reported figures:

These adjustments would transform the reported profit into a loss, highlighting the materiality of the audit concerns.

Management Response

Management has acknowledged the audit qualifications and stated that appropriate measures have been taken for recovery of outstanding receivables through legal recourse. Regarding foreign currency compliance, management indicated they will take appropriate action in the coming year to ensure compliance with Ind-AS-21 requirements.

The Board of Directors approved these results at their meeting held on February 5, 2026, with the meeting conducted from 1:30 PM to 2:15 PM. The company maintains its paid-up equity share capital of Rs. 2,418.00 lakhs with a face value of Rs. 10 per share.

India's venture capital landscape is witnessing a fundamental shift as investors embrace deep-tech startups with unprecedented enthusiasm. After years of prioritizing quick-scaling consumer internet and software-as-a-service companies, venture capitalists are now backing hardware and advanced engineering ventures that require patient capital and decade-long development cycles.

Funding Surge Signals New Era

The transformation is evident in the numbers. According to Tracxn data, funding into Indian deep-tech startups rose significantly, demonstrating growing investor confidence in the sector.

This surge comes as investors launch dedicated deep-tech initiatives across the ecosystem. Lightspeed has sharpened its focus on India-built deep-tech companies, while Speciale Invest announced plans for a ₹1,400-crore fund. Other notable developments include Shastra VC's deep-tech fellowship, IIT Bombay's SINE launching India's first incubator-linked deep-tech VC fund, and BYT Capital debuting its ₹180-crore maiden fund.

Government Support Catalyzes Private Investment

Policy initiatives are playing a crucial role in this transformation. In April, commerce minister Piyush Goyal announced a ₹10,000-crore 'fund of funds' for deep-tech, with ₹2,000 crore earmarked for lab-to-market transitions. This government backing is helping de-risk early innovation in strategic sectors including defense, space, semiconductors, and climate technology.

"Deep tech by nature requires blended capital, patient venture funding alongside catalytic public support," said Sadhika Agarwal, who leads investments at Equirus InnovateX Fund. The approach mirrors successful policy-led initiatives in renewables and electronics manufacturing through production-linked incentive schemes.

Startup Success Stories Emerge

The changing investor mindset is evident in startup experiences. Makers Hive, a Hyderabad-based deep-tech startup, recently raised its first VC-backed bridge round of ₹10 crore from Silverneedle Ventures and is in talks for a Series A between March and May. "Now, nobody is talking about timelines. The questions are about patents, IP and what technology you are building. Earlier, it was about how fast you could scale," said founder Vempati.

Similarly, Bengaluru-based Tsalla Aerospace has seen conversations shift dramatically. "With validated technology, government contracts, real deployments and revenue visibility, VCs now engage more seriously. The tone has shifted from 'prove this can work' to 'how big can this get,'" explained founder and CEO Vinayak Tsalla.

Traditional VC Dominance Gives Way

Historically, India's VC ecosystem has been dominated by sectors offering quick returns. According to Bain and Co.'s venture capital report 2025, consumer internet, fintech, and SaaS together accounted for 60-70% of VC investment value in 2024.

Despite this progress, deep-tech still represents a smaller portion of total VC investment, though its share is growing as investors recognize the sector's strategic importance and long-term value potential.

The Valley of Death Challenge

While funding availability has improved at the pre-seed stage, significant gaps remain in later rounds. "Pre-seed funding has improved significantly, but capital thins out sharply at Seed and Series A/B, especially for companies building original technology rather than services," noted Vinayak of Tsalla Aerospace.

This "valley of death" typically occurs between technology readiness levels 4 and 7, when startups have proven their technology in labs but need substantial capital for commercial-scale production. "Early-stage money exists, and growth-stage capital comes once the technology is proven. The problem is the middle," said Amit Chand, founder of BYT Capital.

Road Ahead: Patience and Persistence

Investors are adapting their strategies for deep-tech's unique requirements. Venture capitalists are restructuring fund tenures, deployment schedules, and follow-on strategies to accommodate longer development cycles. "Longer tenures and extended harvesting periods are becoming the norm," said Agarwal from Equirus.

The sector's potential is evident in global success stories, with a nearly 6x increase in global deep-tech unicorn exits between 2018 and 2022. Recent high-profile acquisitions include Google's $32 billion purchase of cloud security leader Wiz and Marvell Technology's $3 billion acquisition of Celestial AI.

As Vishesh Rajaram, co-founder and managing partner at Speciale Invest, observed: "Deep-tech doesn't change to fit venture capital. Venture capital has to adapt and learn." The question now is whether this new wave of patient capital will successfully bridge the funding gaps and help Indian deep-tech startups achieve their full potential.