Simplex Realty Limited , a prominent player in the property development sector, has reported a challenging first quarter, marked by a significant decline in revenue and a shift from profit to loss. The company's Board of Directors approved the unaudited financial results in a meeting held on August 6.

Financial Performance

The standalone financial results for Q1 reveal:

The company's revenue from operations saw a substantial decrease, dropping to ₹250.16 lakhs in Q1 from ₹400.76 lakhs in the previous quarter and ₹479.53 lakhs in the same quarter last year. This represents a 37.6% quarter-on-quarter decline and a 47.8% year-on-year decrease.

Despite the revenue contraction, Simplex Realty managed to report a profit before tax of ₹51.02 lakhs. However, after accounting for tax expenses, including a significant deferred tax liability of ₹155.52 lakhs, the company posted a net loss of ₹112.73 lakhs for the quarter.

Consolidated Results

On a consolidated basis, the results mirror the standalone performance:

• Total income (including other income): ₹353.57 lakhs
• Loss after tax: ₹113.83 lakhs

This consolidated loss contrasts sharply with the profit of ₹96.25 lakhs reported in the same period last year.

Strategic Developments

In addition to the financial results, the Board approved a supplementary agreement with its subsidiary for project assignment. The details of this agreement are expected to be disclosed upon execution, as per regulatory requirements.

Segment Information

Simplex Realty continues to operate solely in the property development segment, with no additional reportable segments under Ind AS 108.

Auditor's Review

The statutory auditors, Khandelwal & Mehta LLP, conducted a limited review of the financial results. They highlighted concerns regarding two associate companies:

• Both associates have accumulated losses and fully eroded net worth.
• This situation raises uncertainties about their ability to continue as going concerns.

However, the management has prepared the financial results of both associate companies on a going concern basis, indicating their confidence in future business prospects.

Looking Ahead

While the Q1 results present challenges for Simplex Realty, the approval of the subsidiary project assignment suggests that the company is actively pursuing strategic initiatives. Stakeholders will be keenly watching how these moves, along with potential improvements in the property market, might influence the company's performance in the coming quarters.

Investors and market analysts will likely be looking for more details on the company's strategies to address the revenue decline and return to profitability in the subsequent quarters.

Simplex Realty has announced a significant restructuring of its subsidiary ownership through a strategic Shareholders Agreement (SHA) with Modern India Limited and Simplex Modern Homes Private Limited. The agreement, signed on July 25, 2025, marks a pivotal shift in the company's corporate structure and investment strategy.

Key Points of the Agreement

• Divestment and Investment: Simplex Realty will divest 4,900 equity shares of Rs. 10.00 each from its wholly-owned subsidiary, Simplex Modern Homes Private Limited, to Modern India Limited. Simultaneously, Simplex Realty plans to invest in preference shares of the same subsidiary.

• Change in Subsidiary Status: Following this transaction, Simplex Modern Homes Private Limited will no longer be a wholly-owned subsidiary but will remain a subsidiary of Simplex Realty Limited.

• Board Representation: The agreement grants both Simplex Realty and Modern India Limited the right to nominate two directors each to the subsidiary's board, ensuring balanced representation and strategic input from both parties.

• Related Party Transaction: The company has disclosed that this transaction is classified as a related party transaction, adhering to regulatory transparency requirements.

Financial Details

Regulatory Compliance

Simplex Realty Limited has made this disclosure in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company submitted detailed information to the BSE Limited, ensuring transparency in its corporate actions.

Impact and Outlook

This strategic move is expected to alter the dynamics of Simplex Realty's subsidiary management while potentially opening new avenues for growth and collaboration with Modern India Limited. The restructuring could lead to synergies between the involved parties, possibly enhancing operational efficiencies and market positioning.

As the real estate sector continues to evolve, such strategic partnerships and restructurings may become increasingly common, allowing companies to optimize their corporate structures and leverage complementary strengths.

Investors and market watchers will likely keep a close eye on how this restructuring impacts Simplex Realty's operations and financial performance in the coming quarters.