Inducto Steel Reports Rs 74.54 Lakh Loss in Q2 FY26, Auditors Flag Concerns

Inducto Steel Limited , a company listed on the Bombay Stock Exchange (BSE), has reported a net loss of Rs 74.54 lakhs for the quarter ended September 30, 2025. This marks a significant increase in losses compared to the previous quarter's loss of Rs 24.76 lakhs.

Financial Performance

The company's board of directors approved the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2025, at a meeting held on November 13, 2025. The board meeting commenced at 5:00 PM and concluded at 5:30 PM.

Auditor Concerns

In a notable development, the company's auditors have highlighted concerns regarding the recoverability of Rs 21.26 crores invested in partnership firms. This flagging of potential risks associated with these investments adds an additional layer of complexity to Inducto Steel's financial situation.

Corporate Governance and Accounting Standards

The financial results were reviewed by the Audit Committee before being approved by the Board of Directors, aligning with standard corporate governance practices and regulatory requirements. Inducto Steel has prepared its financial results in accordance with Indian Accounting Standards (Ind-AS), as prescribed under section 133 of the Companies Act 2013, adhering to the relevant rules of the Companies (Indian Accounting Standards) Rules, 2015, and subsequent amendments.

Operational Segments

The company's operations are primarily categorized into two geographic segments: Mumbai and Bhavnagar. This segmentation is in line with Ind AS 108, which establishes standards for reporting information about operating segments and related geographic area disclosures.

Consolidated Financial Statements

Inducto Steel's consolidated financial statements include the financial results of Calvin Divine Enterprise LLP, an associate of the company. These statements are prepared in accordance with Indian Accounting Standard 110 on Consolidated Financial Statements.

While Inducto Steel faces challenges with its current financial performance and auditor-flagged concerns, it continues to maintain transparency in its financial reporting and adherence to regulatory standards. Investors and stakeholders will likely be watching closely to see how the company addresses these issues in the coming quarters.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-5.00%	-6.81%	-7.98%	-4.08%	-13.30%	+185.00%

Inducto Steel announced a significant change in its auditing team as LLB & Co., Chartered Accountants, tendered their resignation as Joint Statutory Auditors, effective August 13, 2025. The company disclosed this information in a regulatory filing to the Bombay Stock Exchange (BSE) in compliance with SEBI regulations.

Reasons for Resignation

According to the resignation letter submitted by LLB & Co., the primary reason for their departure is pre-occupation with other assignments. The auditing firm expressed their inability to continue as Joint Statutory Auditors of Inducto Steel due to these commitments.

Auditor's Tenure and Recent Work

LLB & Co. was initially appointed for a term of five consecutive financial years, from April 1, 2024, to March 31, 2029. Their appointment began on July 9, 2024. Prior to their resignation, the firm's most recent engagement with Inducto Steel involved preparing the Limited Review Report for the quarter ended June 30, 2025.

Regulatory Compliance and Disclosures

In adherence to Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, and SEBI Circular No. CIR/CFD/CMD1/114/2019 dated October 18, 2019, Inducto Steel provided detailed information regarding the auditor's resignation. The company confirmed that there were no material reasons for the resignation beyond those stated by LLB & Co.

No Outstanding Concerns

Importantly, LLB & Co. affirmed that they had not raised any concerns with the Audit Committee or Board of Directors prior to their resignation. This declaration suggests that the departure is amicable and not related to any underlying issues with the company's financial reporting or governance.

Next Steps

Inducto Steel will now need to appoint a new Joint Statutory Auditor to fill the vacancy left by LLB & Co. The company is expected to initiate the process of selecting a new auditor in due course, ensuring continuity in its financial reporting and compliance obligations.

Shareholders and investors of Inducto Steel should take note of this change in the company's auditing team. While the resignation appears to be due to the auditor's other commitments rather than any issues with the company itself, it is an important corporate governance matter that warrants attention.