Dharan Infra-EPC Limited Reports Audited Financial Results with FEMA Violations

Dharan Infra-EPC Limited (formerly KBC Global Limited) has released its audited standalone and consolidated financial results for the quarter and year ended March 31, 2025, following approval by the Board of Directors on May 30, 2025. The company received a qualified audit opinion due to violations of Foreign Exchange Management Act (FEMA) regulations.

Key Financial Highlights

Year-end Financial Results

Metric	FY 2025	FY 2024	YoY Change
Revenue (in cr)	17.99	48.20	-62.68%
EBITDA (in cr)	-39.61	-25.90	52.93%
Net Profit (in cr)	-38.31	-36.60	4.67%
EPS (in Rs)	-0.11	-0.33	-66.67%

Quarter-end Financial Results

Metric	Q4 FY 2025	Q3 FY 2025	QoQ Change
Revenue (in cr)	2.40	2.10	14.29%
EBITDA (in cr)	-0.40	-23.10	-98.27%
Net Profit (in cr)	-2.50	-20.00	-87.50%
EPS (in Rs)	-0.01	-0.08	-87.50%

Financial Performance Analysis

Revenue Decline: The company experienced a significant year-over-year revenue decline of 62.68%, from Rs 48.20 crore in FY 2024 to Rs 17.99 crore in FY 2025. However, there was a slight improvement in the quarter-end results, with revenue increasing by 14.29% compared to the previous quarter.
Profitability Challenges: Dharan Infra-EPC Limited continued to face profitability issues, with negative EBITDA and net losses in both yearly and quarterly results. The net loss for FY 2025 increased marginally to Rs 38.31 crore from Rs 36.60 crore in the previous year.
Operational Efficiency: The company's operating profit margin (OPM) for FY 2025 stood at -220.18%, indicating severe operational challenges and inefficiencies.
Debt Servicing: Interest expenses for FY 2025 decreased to Rs 3.59 crore from Rs 10.60 crore in the previous year, suggesting potential debt restructuring or reduction.

Audit Qualifications and Regulatory Concerns

The auditors issued a qualified opinion on the financial results, highlighting two main areas of concern:

Improper End-use of Funds: The company was found to have violated FEMA regulations regarding the proper utilization of funds raised through Foreign Currency Convertible Bonds (FCCBs).
Compliance Delays: There were delays and errors in filing required forms and compliances with the Reserve Bank of India (RBI).

These violations raise significant concerns about the company's regulatory compliance and financial management practices. The management has stated that they are in the process of addressing these issues and have submitted a compounding application to the RBI.

Outlook and Challenges

Dharan Infra-EPC Limited faces several challenges going forward:

Financial Stability: The company needs to address its declining revenue and persistent losses to ensure long-term viability.
Regulatory Compliance: Resolving the FEMA violations and improving compliance processes are crucial for restoring investor confidence.
Operational Efficiency: Significant improvements in operational efficiency are needed to turn around the negative operating profit margins.
Debt Management: While interest expenses have decreased, the company must continue to manage its debt effectively given its current financial position.

Investors and stakeholders should closely monitor the company's efforts to address these challenges and its progress in resolving the regulatory issues highlighted in the audit report.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-2.63%	-9.76%	-11.90%	-5.13%	-84.45%	-93.59%

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:

Aspect	Details
Project Capacity	75 MW (AC) / 95.10 MWp (DC)
Project Type	Grid-interactive, ground-mounted solar photovoltaic
Location	9 sites in Nanded District, Maharashtra
Contract Value	₹215 crore
Expected Completion	FY2025-26 / FY2026-27

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.