UCAL Limited has announced its unaudited financial results for the quarter and nine months ended December 31, 2025, presenting a mixed performance across standalone and consolidated operations. The automotive components manufacturer's Board of Directors approved these results during their meeting held on February 12, 2026.

Standalone Financial Performance

The company's standalone operations showed resilient revenue growth during the third quarter of FY26. Key financial metrics demonstrate the following performance:

For the nine-month period ended December 31, 2025, standalone performance showed stronger results with revenue from operations reaching ₹46,529.29 lakhs compared to ₹43,266.07 lakhs in the corresponding period of the previous year, representing a growth of 7.54%. The company achieved a net profit of ₹280.34 lakhs for the nine-month period, though this was significantly lower than ₹2,400.27 lakhs recorded in the same period last year.

Impact of New Labour Code

A significant factor affecting the company's Q3 FY26 performance was the implementation of new labour codes. The company recorded exceptional items of ₹239.08 lakhs on a standalone basis and ₹258.24 lakhs on a consolidated basis related to the statutory impact of the New Labour Code. This regulatory change resulted in increased gratuity liability arising from past service, which the company has classified as exceptional items due to their material and non-recurring nature.

Consolidated Financial Results

The consolidated financial performance presented challenges during the quarter, reflecting the broader operational complexities across the group:

Corporate Developments

The company has initiated significant corporate restructuring activities. The Board of Directors approved issuing a postal ballot notice to shareholders seeking approval for the transfer or dilution of stake in UCAL Holdings Inc., USA, a wholly-owned foreign subsidiary. Additionally, shareholders will vote on the sale or transfer of residential property owned by UCAL Polymer Industries Limited, another wholly-owned subsidiary.

Subsidiary Performance

The consolidated results include performance from key subsidiaries. UCAL Holdings Inc. reported total assets of ₹18,664.30 lakhs as of December 31, 2025, with total income of ₹14,073.25 lakhs and a net loss of ₹2,095.02 lakhs for the nine-month period. UCAL Polymer Industries Limited showed total assets of ₹7,109.90 lakhs with total income of ₹3,855.67 lakhs and a net loss of ₹162.53 lakhs for the same period.

Financial Position and Outlook

The company maintains a stable capital structure with paid-up equity share capital of ₹2,211.36 lakhs, consisting of 221.14 lakh equity shares of ₹10 each. Other equity excluding revaluation reserves stood at ₹35,673.63 lakhs on a standalone basis and ₹31,539.89 lakhs on a consolidated basis as of December 31, 2025.

UCAL Limited operates exclusively in the automotive components segment, focusing on manufacturing solutions for the automotive industry. The company continues to monitor developments related to the finalization of central and state rules under the new labour codes and will account for any additional impacts as they are notified by the government.

Ucal Limited announced major corporate restructuring decisions following its board meeting on January 13, 2026. The board approved two significant transactions that will require shareholder consent through a postal ballot process, marking strategic moves in the company's operational structure.

Board Approvals for Strategic Transactions

The board considered and approved the dilution or reduction of shareholding in Ucal Holdings Inc, USA (UHI), a material subsidiary of the company. The proposed dilution could be up to 90% of the company's stake in UHI, potentially leading to cessation or modification of control over the US subsidiary.

The board also approved the sale of a residential plot owned by wholly-owned material subsidiary Ucal Polymer Industries Limited (UPIL). The transaction involves a 6.97-acre property being sold to promoter group company Sujo Land and Properties Private Limited.

Asset Sale Transaction Details

The residential plot sale represents a significant asset divestment for the subsidiary, with the transaction value capped at ₹45 crores on a cash basis at guideline value.

The subsidiary UPIL's financial contribution to the parent company shows total income of ₹45.28 crores representing 5.50% of consolidated income, and net worth of ₹56.43 crores representing 15.90% of consolidated net worth for the financial year ending March 31, 2025.

Regulatory Compliance and Approval Process

Both transactions require shareholder approval under SEBI Listing Obligations and Disclosure Requirements Regulations 2015. The board approved a draft postal ballot notice seeking consent through special resolution as per Section 110 of the Companies Act, 2013.

The asset sale transaction falls under related party transaction category since it involves the promoter group company as buyer. However, it does not breach the 10% threshold limit of annual consolidated turnover for material related party transactions under SEBI regulations. The company obtained prior approval from its Audit Committee and Board despite the parent company not being a direct party to the transaction.

Strategic Implications

The shareholding dilution in the US subsidiary aims to induct potential investors, potentially providing capital infusion and strategic partnerships for international operations. The residential plot sale by UPIL will generate cash proceeds for the subsidiary while involving a promoter group entity in the transaction structure.

Both transactions are subject to shareholder approval through the postal ballot process, with the company ensuring compliance with all applicable SEBI regulations and disclosure requirements. The completion of these transactions will depend on receiving requisite approvals and fulfilling regulatory conditions.