Dhatre Udyog Reports Q1 Profit Amid Manufacturing Shutdown
Dhatre Udyog Limited reported Q1 revenue of ₹902.64 lakh and net profit of ₹10.44 lakh. The company is shutting down manufacturing operations due to outdated infrastructure, disposing of plant machinery, and selling factory land. It's now focusing on iron and steel trading while exploring options for new manufacturing or real estate development. The company fully impaired its investment in associate Hari Equipments Private Limited due to losses. Auditors issued a qualified opinion citing pending trade confirmations and lack of verification reports for assets held for sale.
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Dhatre Udyog Limited, formerly known as Narayani Steels Limited, has reported its financial results for the first quarter, revealing a modest profit despite ongoing restructuring efforts.
Financial Performance
The company reported revenue from operations of ₹902.64 lakh for the quarter, with a net profit of ₹10.44 lakh. This performance comes amidst significant changes in the company's operations.
| Particulars | Q1 (₹ in lakh) |
|---|---|
| Revenue from Operations | 902.64 |
| Total Income | 931.14 |
| Total Expenses | 918.49 |
| Profit Before Tax | 12.65 |
| Net Profit | 10.44 |
Manufacturing Shutdown and Asset Disposal
In a significant move, Dhatre Udyog's Board of Directors has decided to shut down its manufacturing operations. This decision comes in response to challenges posed by aging plant infrastructure, outdated machinery, and technological obsolescence, which have led to higher production costs.
The company is now in the process of disposing of its plant and machinery as scrap. Additionally, Dhatre Udyog has entered into an agreement for the sale of its factory land, although the sale will only be recognized in the company's books upon complete realization of the consideration amount.
Business Focus and Future Plans
Dhatre Udyog is currently engaged in the trading of iron and steel products. The Board is exploring options to either set up a new plant to resume manufacturing operations or diversify by monetizing factory land and other property in Kakinada. The company is considering developing these lands into small plots and using the proceeds to fund upcoming real estate projects.
Associate Company Impairment
The company has reported that its associate, Hari Equipments Private Limited, has suffered substantial losses, resulting in a complete erosion of its net worth. Consequently, Dhatre Udyog has provided a 100% impairment on its investment in the associate company.
Auditor's Observations
The statutory auditors have issued a qualified opinion on the financial results, citing two main concerns:
- Pending confirmations for trade receivables and payables.
- Unavailability of physical verification/valuation reports for assets held for sale worth ₹331.99 lakh.
These qualifications highlight the need for improved financial controls and transparency in the company's reporting processes.
As Dhatre Udyog navigates through this transitional phase, stakeholders will be closely watching how the company's strategic decisions impact its future performance and financial stability.
Historical Stock Returns for Dhatre Udyog
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.19% | -1.38% | -3.32% | -22.40% | -49.41% | +91.34% |
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