Sadbhav Engineering Limited announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing mixed performance with reduced losses but ongoing financial challenges. The infrastructure company's Board of Directors approved the results at their meeting held on February 14, 2026.

Financial Performance Overview

The company's standalone financial performance for the quarter showed improvement in loss reduction despite operational challenges.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, the company demonstrated significant improvement in financial metrics compared to the previous year.

Exceptional Items and Asset Monetization

The company reported exceptional items of ₹1,130.60 lakhs for the quarter, primarily consisting of profit on sale of assets. This reflects the company's ongoing asset monetization strategy as part of its debt restructuring plan.

Operational Challenges and Going Concern

The company continues to face significant operational and financial challenges. Key issues include:

• Difficulties in meeting payment obligations to suppliers and statutory authorities
• Delays and defaults in loan repayments
• Classification as Non-Performing Asset (NPA) by most lenders
• NCLT application filed by one lender under Section 7 of the Insolvency and Bankruptcy Code, 2016

Debt Restructuring Progress

Management has submitted a comprehensive restructuring plan to the consortium of lenders, which includes:

• Monetization of HAM and other assets
• Infusion of funds by promoters
• Cash flows from the Gadag Project
• Receipt of claim amounts from arbitration settlements
• Collection of receivables and refinancing of operational projects

The Lead Bank has already conveyed its sanction for the Debt Restructuring Plan, with other member banks currently seeking approval from their respective authorities.

Auditor Qualifications

The statutory auditors have expressed qualified opinions on several matters, including:

• Contract assets of ₹35,019.32 lakhs related to closed/suspended projects
• Outstanding loan and receivables of ₹20,178.30 lakhs from step-down subsidiary RPTPL
• Non-compliance with Section 203 of the Companies Act, 2013 due to absence of Chief Financial Officer since April 8, 2024

Despite these challenges, management remains confident about the company's ability to continue operations based on the expected approval of the restructuring plan and anticipated asset monetization proceeds.

Sadbhav Engineering has disclosed the release of pledged equity shares by Catalyst Trusteeship Limited under SEBI regulations. The transaction involves the release of encumbered shares that were held as security by the debenture trustee.

Share Release Details

Catalyst Trusteeship Limited, acting as Debenture Trustee on behalf of debenture holders of Sadbhav Gadag Highway Private Limited, released 1,00,63,495 pledged equity shares of Sadbhav Engineering Limited on January 30, 2026. The release was executed through the release of pledged shares mechanism.

Holdings Impact Analysis

The share release significantly altered Catalyst Trusteeship Limited's position in Sadbhav Engineering. Prior to the transaction, the trustee held 1,00,63,495 shares in the nature of encumbrance, representing 5.87% of the total share capital and 5.54% of the total diluted share capital.

Regulatory Compliance

The disclosure was made pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Catalyst Trusteeship Limited does not belong to the promoter or promoter group of Sadbhav Engineering Limited.

Key regulatory aspects include:

• Compliance with SEBI substantial acquisition regulations
• Proper disclosure of encumbrance release
• Maintenance of transparency in shareholding changes
• Adherence to prescribed timelines for regulatory filings

Company Capital Structure

Sadbhav Engineering Limited's equity share capital remained unchanged following the transaction. The company maintains 17,15,70,800 equity shares of Rs. 1.00 each as its total voting capital. The total diluted share capital stands at 18,15,70,800 equity shares of Rs. 1.00 each, accounting for potential conversion of outstanding convertible securities.

The share release represents a reduction in encumbrance on Sadbhav Engineering's equity shares, potentially providing greater flexibility in the company's capital structure management. The transaction was executed through Catalyst Trusteeship Limited's Mumbai office, with documentation signed by Senior Vice President Deesha Srikkanth on February 03, 2026.