Franklin Industries Limited has announced its unaudited financial results for the quarter and half-year ended September 30, 2025, revealing a mixed performance with a notable decline in revenue but an improvement in profitability.

Financial Highlights

• Revenue: The company reported a significant drop in revenue for Q2 2025, with sales decreasing to ₹11.80 crore from ₹91.40 crore in the previous quarter, marking an 87.09% decline.
• Net Profit: Despite the revenue drop, Franklin Industries managed to turn a profit of ₹2.10 crore in Q2 2025, compared to a loss of ₹3.50 crore in the previous quarter.
• Operating Profit Margin (OPM): The OPM improved substantially to 24.81% in Q2 2025, up from -3.83% in the previous quarter.
• Earnings Per Share (EPS): The company's EPS for Q2 2025 stood at ₹0.07, an improvement from the previous quarter's -₹0.12.

Key Developments

Rights Issue Completion

Franklin Industries successfully completed a rights issue of 48.20 crore equity shares of ₹1 each in August 2025. This move increased the company's share capital from ₹28.92 crore to ₹77.12 crore, potentially strengthening its financial position.

Improved Profitability

Despite the sharp decline in revenue, the company managed to improve its bottom line, turning a loss into a profit. This may indicate better cost management or higher-margin sales during the quarter.

Operational Efficiency

The significant improvement in Operating Profit Margin suggests that the company has potentially streamlined its operations or reduced costs effectively.

Financial Performance Table

Outlook

While Franklin Industries has shown improvement in profitability and operational efficiency, the substantial decline in revenue may raise concerns about the company's market position and sales performance. The successful completion of the rights issue indicates investor confidence and provides additional capital for the company's operations and potential growth initiatives.

Investors and stakeholders will likely be watching closely to see if the company can maintain its improved profitability while working to recover its revenue in the coming quarters. The management's strategies for addressing the revenue decline and capitalizing on the improved operational efficiency will be crucial for the company's future performance.

Franklin Industries Limited has taken a significant step towards enhancing transparency and investor confidence in its ongoing Rights Issue. The company's Board of Directors has approved the voluntary appointment of a SEBI-registered Credit Rating Agency as the Monitoring Agency to oversee the utilization of funds raised through the Rights Issue.

Key Developments

• Monitoring Agency Appointment: The Board has approved the voluntary appointment of a SEBI-registered Credit Rating Agency as the Monitoring Agency for the Rights Issue funds.
• Fund Utilization Control: No Rights Issue proceeds will be utilized until the Monitoring Agency is formally appointed.
• Periodic Reporting: The Monitoring Agency will submit quarterly and event-based monitoring reports to regulatory authorities.
• Internal Oversight: Reports will be regularly reviewed by the company's Audit Committee and Board of Directors.

Enhanced Governance Measures

Franklin Industries has implemented several measures to ensure proper fund utilization and transparency:

1. Controlled Fund Usage: The company has resolved not to use any part of the Rights Issue proceeds until the Monitoring Agency is in place.
2. Regulatory Compliance: The appointment aligns with SEBI (ICDR) Regulations, 2018, demonstrating the company's commitment to regulatory standards.
3. Comprehensive Reporting: Quarterly and event-based monitoring reports will be submitted to BSE Limited and other applicable regulatory authorities.
4. Board Authorization: All directors have been authorized to take necessary actions for appointing the Monitoring Agency and obtaining required approvals.

Board Meeting Details

The decision was made during a Board meeting held on July 25, 2025, which commenced at 12:45 P.M and concluded at 1:00 P.M. The meeting was brief but impactful, focusing on this crucial governance measure.

Management Commentary

Maheshkumar Jethabhai Patel, Managing Director of Franklin Industries Limited, signed off on the Board meeting outcome, underlining the company's commitment to this initiative.

This move by Franklin Industries demonstrates a proactive approach to corporate governance and transparency, potentially boosting investor confidence in the ongoing Rights Issue. The appointment of a Monitoring Agency and the implementation of stringent fund utilization controls showcase the company's dedication to responsible financial management and shareholder interests.