Dharan Infra-EPC Limited (formerly KBC Global Limited) has reported a standalone net loss of ₹753.21 crores for the quarter ended June 30, compared to ₹1,530.04 crores loss in the previous year quarter. The company continues to face significant regulatory and operational challenges.

Key Financial Highlights

Regulatory and Operational Challenges

FEMA Violations

The company is facing issues related to improper deployment of USD 80.62 million raised through Foreign Currency Convertible Bonds (FCCBs), violating Foreign Exchange Management Act (FEMA) regulations.

Financial Difficulties

• Dharan Infra-EPC Limited is experiencing difficulties in meeting its loan repayment obligations on time.
• The company has not filed GST returns since December 2023, indicating ongoing compliance issues.

Operational Issues

Most of the company's construction sites remain non-operational, significantly impacting its business activities and revenue generation.

Outlook and Challenges

Dharan Infra-EPC Limited faces several critical challenges that require attention:

1. Regulatory Compliance: Resolving the FEMA violations and addressing the GST non-compliance issues.

2. Financial Stability: Addressing persistent losses and improving financial position.

3. Operational Reactivation: Efforts to restart non-operational construction sites.

4. Debt Management: Managing debt effectively and meeting repayment obligations.

While the reduction in quarterly losses compared to the previous year may indicate some improvement, the company still faces substantial hurdles in its path to recovery. Investors and stakeholders may want to monitor the company's efforts to address these challenges, particularly its progress in resolving the regulatory issues and improving operational efficiency.

Dharan Infra-EPC Limited 's wholly-owned subsidiary, Dharan Infra Solar Private Limited, has signed a significant supply agreement with Skymax Infrapower Limited for a solar power project valued at ₹215 crore. This development marks a substantial step in the company's expansion in the renewable energy sector.

Project Details

The contract encompasses the design, supply, and installation of plant equipment for a large-scale solar photovoltaic power project. Here are the key details of the project:

Scope of Work

Dharan Infra Solar Private Limited's responsibilities under this agreement include:

• Design and engineering
• Procurement and supply of equipment
• Installation of plant structures and related works
• Testing and commissioning of the solar power project

Strategic Implications

This agreement is considered a material contract in the ordinary course of business for Dharan Infra-EPC Limited. It is expected to have a direct impact on the company's consolidated financial and operational performance.

The phased execution of the project aligns with the mutually agreed execution plan between Dharan Infra Solar Private Limited and Skymax Infrapower Limited. This approach may allow for better resource allocation and risk management throughout the project lifecycle.

Industry Context

The securing of this contract by Dharan Infra-EPC's subsidiary reflects the ongoing growth in India's renewable energy sector, particularly in solar power. Maharashtra's commitment to expanding its solar capacity is evident from the scale of this project, spread across multiple sites in the Nanded District.

As India continues to push for increased renewable energy adoption, projects of this scale play a crucial role in the country's transition towards cleaner energy sources. The successful execution of this project could potentially strengthen Dharan Infra-EPC's position in the competitive solar energy market.

Shareholders of Dharan Infra-EPC Limited can access the detailed agreement for inspection at the company's Registered Office during business hours, as per the company's disclosure.