Gokak Textiles announced its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, revealing persistent operational and financial challenges. The Board of Directors approved these results at their meeting held on February 12, 2026.

Financial Performance Overview

The company's financial performance for Q3FY26 showed mixed results with reduced losses but declining revenue. The textile and power company reported a net loss of Rs 607.30 lakhs for the quarter ended December 31, 2025, compared to Rs 939.91 lakhs loss in the corresponding quarter of the previous year.

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, Gokak Textiles' financial position deteriorated further. The company reported a net loss of Rs 3,210.84 lakhs compared to Rs 2,335.32 lakhs in the corresponding period of the previous year, representing a 37.49% increase in losses.

Segment-wise Performance

Gokak Textiles operates through two primary segments: textiles and power generation. The segment-wise analysis for Q3FY26 reveals varying performance across business lines.

Textile Segment:

• Revenue: Rs 938.01 lakhs (Q3FY26) vs Rs 1,504.59 lakhs (Q3FY25)
• Segment Loss: Rs 636.69 lakhs (Q3FY26) vs Rs 648.61 lakhs (Q3FY25)

Power Segment:

• Revenue: Rs 1,058.87 lakhs (Q3FY26) vs Rs 965.97 lakhs (Q3FY25)
• Segment Result: Rs 29.39 lakhs profit (Q3FY26) vs Rs 291.30 lakhs loss (Q3FY25)

Exceptional Items and Insurance Claims

During Q3FY26, the company recorded exceptional income of Rs 270.54 lakhs from insurance claim settlements. This relates to partial settlements received from insurers for fire and lightning damage incidents at the company's solar power plant. The company has filed comprehensive insurance claims for damages and business losses, which remain under process with insurers.

Going Concern and Financial Support

The company faces significant financial challenges with current liabilities exceeding current assets by Rs 5,034.65 lakhs as at December 31, 2025. Accumulated losses have reached Rs 26,080.85 lakhs, and the company's net worth has been fully eroded. The continuity of operations depends on continued support from Shapoorji Pallonji And Company Private Limited (SPCPL), which has provided additional financial support of Rs 1,135.00 lakhs during the nine-month period through perpetual loans.

Operational Challenges

The company's solar power plant experienced multiple operational disruptions during the period, including transformer failures due to lightning strikes and grid supply issues. These incidents impacted power generation capacity, though repairs have been completed and full 40MW capacity has been restored. The textile division continues to face business slowdown and working capital constraints, with payments to creditors and employees running in arrears.

Gokak textiles Limited has informed the stock exchange about a three-month delay in the completion of its knitwear manufacturing plant sale, citing process delays as the primary reason for the postponement.

Sale Timeline Extended

The textile company announced on January 27, 2026, that the proposed transaction for selling its knitwear manufacturing plant, originally scheduled for completion in January 2026, has been postponed by three months. This pushes the expected completion date to April 2026.

Plant Details and Valuation

The knitwear manufacturing facility is located at Bagalkot Road, Village Marihal, District Belagavi, Karnataka State. The plant sits on freehold land spanning 15.65 acres, including utilities, and was originally established in 1995 to cater exclusively to the export market.

Financial Performance

The knitwear business has experienced declining performance over recent years. During FY 2024-25, the unit generated turnover of Rs. 505.47 lakhs, representing 5.17% of the company's total revenue from operations. However, the unit maintained a negative net worth of Rs. 4,115.21 lakhs as of March 31, 2025.

Buyer Information

The purchaser, M/s V. G. Parekh & Co., operates in real estate development and leasing within Karnataka, with headquarters in Vijayapura. The company confirmed that the buyer does not belong to the promoter, promoter group, or group companies, making this a non-related party transaction.

Operational Changes

The company had previously relocated specialized garment manufacturing equipment, including fabric dyeing and knitting machines, to its Mills Division in Gokak Falls, Karnataka during 2015-16. Currently, only cutting and stitching operations are conducted at the Marihal facility.

The sale requires shareholder approval through a postal ballot process, as mandated under Section 180(1)(a) of the Companies Act, 2013, and compliance with regulation 37A of the LODR Regulations.

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