Sanathnagar Enterprises Reports Reduced Loss for H1 FY2026, Withdraws from Merger Scheme

Sanathnagar Enterprises Limited (SEL), a real estate development company, has reported its financial results for the quarter and six months ended September 30, 2025. The company has shown a significant reduction in losses compared to the previous year, along with a decision to withdraw from a previously approved merger scheme.

Financial Performance

SEL's financial results for the first half of FY2026 show a marked improvement in its bottom line:

The company has managed to significantly narrow its losses, reporting a net loss of ₹2.95 lakhs for the six-month period ended September 30, 2025, compared to a loss of ₹372.22 lakhs in the same period last year. This represents a substantial improvement of 99.21% year-over-year.

Quarterly Performance

For the quarter ended September 30, 2025, SEL posted a profit of ₹1.32 lakhs, a notable turnaround from the loss of ₹366.78 lakhs in the corresponding quarter of the previous year.

Revenue and Expenses

The company's total income for H1 FY2026 stood at ₹6.47 lakhs, down from ₹18.47 lakhs in H1 FY2025. It's worth noting that the entire income was classified as 'other income' with no revenue from operations reported.

Total expenses for the half-year decreased to ₹9.42 lakhs from ₹19.74 lakhs in the previous year, contributing to the reduced losses.

Operational Focus

Sanathnagar Enterprises Limited continues to operate in real estate development as its single reportable segment, as disclosed under Ind AS 108 on 'Operating Segment'.

Withdrawal from Merger Scheme

In a significant corporate development, the Board of Directors has decided to withdraw the company from a previously approved merger scheme. The scheme, which was considered and approved on July 30, 2024, involved the merger by absorption of Sanathnagar Enterprises Limited with Lodha Developers Limited (formerly known as Macrotech Developers Limited) and their respective shareholders.

Audit Review

MSKA & Associates, the statutory auditors of the company, have provided an unmodified review opinion on the financial results for the quarter and half-year ended September 30, 2025.

Conclusion

While Sanathnagar Enterprises Limited has shown a substantial reduction in losses and even turned a small profit in the latest quarter, the company's lack of operational revenue and reliance on 'other income' may be areas of concern for investors. The decision to withdraw from the merger scheme with Lodha Developers Limited could have significant implications for the company's future strategy and operations.

Investors and stakeholders will likely be watching closely to see how SEL plans to generate operational revenue and sustain its improved financial performance in the coming quarters.