Majestic Auto Limited, a prominent player in the automotive sector, has released its unaudited financial results for the second quarter of fiscal year 2026, ending September 30, 2025. The company's performance paints a mixed picture, with significant revenue growth offset by a net loss.

Financial Highlights

For the half-year period:

The company witnessed a substantial increase in revenue from operations, more than doubling year-over-year for the quarter. However, this growth was accompanied by a significant swing from profit to loss compared to the same quarter last year.

Key Developments

New Company Secretary

Majestic Auto has appointed Mr. Nishant Sharma as the Company Secretary and Compliance Officer with immediate effect.

Divestment of Subsidiary

The company has liquidated its entire investment in its subsidiary, Emirates Technologies Private Limited. This involved selling 1.60 crore equity shares at ₹122.50 per share, totaling ₹196 crore.

Leasing Agreement

Majestic Auto received an advance of ₹6.00 crore during the quarter as part of a plot leasing agreement with Cyrrus Manufacturing LLP.

Financial Analysis

Despite the robust top-line growth, the company's bottom line has been significantly impacted. The shift from a substantial profit in Q2 FY2025 to a loss in Q2 FY2026 suggests increased operational costs or one-time expenses that have affected profitability.

The half-yearly results show a similar trend, with strong revenue growth but a sharp decline in net profit. This indicates that while the company has been successful in expanding its operations, it faces challenges in maintaining profitability.

The divestment of Emirates Technologies Private Limited represents a significant strategic move, potentially aimed at streamlining operations or reallocating capital. The proceeds from this sale could provide Majestic Auto with additional liquidity for future investments or debt reduction.

The leasing agreement with Cyrrus Manufacturing LLP, resulting in a ₹6.00 crore advance, suggests that the company is exploring additional revenue streams, possibly to diversify its income sources.

Investors and stakeholders will likely be keen to see how Majestic Auto plans to address the profitability challenges while maintaining its revenue growth momentum in the coming quarters. The appointment of a new Company Secretary may also bring fresh perspectives to the company's compliance and corporate governance practices.

Majestic Auto Limited has successfully concluded the sale of its entire 80% shareholding in Emirates Technologies Private Limited (ETPL) for a total consideration of INR 196.00 crore. The transaction, which began in August, reached its final stage on September 4, with the receipt of the last tranche of INR 54.55 lakh.

Transaction Details

The sale involved the transfer of 1,60,00,000 equity shares of ETPL to six buyers:

Financial Impact

Prior to the sale, ETPL contributed significantly to Majestic Auto's financial position:

• ETPL's net worth: INR 7,249.04 lakhs
• Contribution to Majestic Auto's consolidated net worth: 11.60%

Buyer Profiles

The buyers represent a mix of corporate entities and individuals with backgrounds in real estate development and specialty chemicals:

• Rhombus Infrazone Private Limited and Equilateral Techpark Private Limited: Both companies are involved in real estate development in Noida, focusing on industrial buildings, logistics, and IT/ITES facilities.
• Mr. Naresh Arora: Active in the specialty chemical industry since 1986 and in Noida's real estate sector since 2019.
• Mr. Chirag Arora: Engaged in the specialty chemical industry since 2016 and in Noida's real estate sector since 2019.
• Mr. Gurpreet Singh Sobti: Involved in Noida's real estate sector since 2013.
• Mr. Harsimhar Deep Singh: Active in Noida's real estate sector.

Importantly, none of the buyers are associated with Majestic Auto's promoter group.

Transaction Timeline

The sale process unfolded as follows:

1. August 14: Agreement entered, first tranche of INR 124.66 crore received
2. August 28: Second tranche of INR 70.80 crore received
3. September 4: Final tranche of INR 54.55 lakh received, completing the transaction

Regulatory Compliance

Majestic Auto has adhered to regulatory requirements throughout the sale process:

• The transaction was conducted outside the scheme of arrangement.
• Shareholder approval was obtained via special resolution at the Annual General Meeting held on August 25, 2023, in compliance with Regulation 37A of SEBI Listing Regulations.

With this sale, ETPL has ceased to be a subsidiary of Majestic Auto Limited. The company's timely disclosures and adherence to regulatory norms demonstrate its commitment to transparency in corporate actions.