VL E-Governance & IT Solutions Limited has announced its unaudited financial results for the quarter and nine months ended December 31, 2025, revealing a challenging performance with significant revenue decline and shift to losses. The company's Board of Directors approved these results at their meeting held on February 7, 2026.

Financial Performance Overview

The company's financial performance showed a marked deterioration compared to the previous year. The results highlight substantial challenges in revenue generation and profitability during the current financial year.

Nine-Month Performance Analysis

The nine-month period ending December 31, 2025, also reflected similar challenges with the company moving from profitability to losses. Revenue from operations for the nine-month period stood at ₹1,596.89 lakhs compared to ₹2,571.66 lakhs in the corresponding period of the previous year.

Expense Structure and Cost Management

The company's expense structure showed variations across different categories. Purchase of stock in trade and other operating expenditure remained the largest expense component at ₹448.01 lakhs for Q3 FY26. Employee benefits expense stood at ₹33.67 lakhs, while other expenses totaled ₹36.28 lakhs for the quarter.

Corporate Governance Updates

In addition to the financial results, the Board of Directors made an important appointment in the area of internal audit. On the recommendation of the Audit Committee, K J Kabra & Associates has been appointed as the Internal Auditor of the Company for Financial Year 2025-26.

Regulatory Compliance and Audit Status

The unaudited financial results have been reviewed by the Audit Committee and subsequently approved by the Board of Directors. The company's statutory auditors, B K G & Associates, have conducted a limited review of the financial results and issued an unmodified opinion. The results are prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013.

The company operates within a single business segment of "E-Governance & IT/ITES Business" as per Indian Accounting Standard 108. The paid-up equity share capital remains at ₹10,845.13 lakhs with a face value of ₹10 per share.

VL E-Governance & IT Solutions Limited has reported no deviation from stated objectives in its preferential issue fund utilization for the quarter ended September 30, 2025, according to the monitoring agency report submitted by Care Ratings Limited.

Key Highlights

• The company raised Rs. 400.99 crore through share warrants to non-promoter investors, down from the originally planned Rs. 630 crore due to undersubscription.
• As of September 30, 2025, Rs. 111.08 crore had been utilized, with Rs. 3.23 crore remaining unutilized and deployed in fixed deposits.
• The company's share price stood at Rs. 27.07, significantly below the warrant exercise price of Rs. 75.

Fund Allocation and Utilization

The funds raised through the preferential issue have been allocated across six objectives:

Unutilized Funds Deployment

The remaining unutilized funds of Rs. 3.23 crore have been deployed as follows:

• Rs. 3.00 crore in Fixed Deposits with Union Bank of India, maturing on April 21, 2026, at a 7.30% interest rate.
• Rs. 0.23 crore in a monitoring account with Union Bank of India.

Shareholding and Share Price Impact

The preferential issue has led to changes in the company's shareholding pattern:

• Promoter shareholding decreased from 33.16% (pre-preferential issue) to 23.24% as of September 30, 2025.
• Post-warrant conversion, promoter holding is expected to further decrease to 15.81%.

The company's share price has experienced significant volatility:

• A 58% decline since the preferential issue announcement.
• An 86% drop from its peak price.
• The current share price of Rs. 27.07 is substantially lower than the warrant exercise price of Rs. 75.

Potential Challenges

The monitoring agency has highlighted that the undersubscription in the issue and the current share price being below the exercise price may affect the viability of the stated objectives. The delay in receiving the remaining 71.32% of the subscribed warrant amount could impact the implementation of the company's plans.

Conclusion

While VL E-Governance & IT Solutions Limited reports no deviation from its stated objectives in fund utilization, the undersubscription of the preferential issue and the current market price of its shares pose potential challenges. Investors should closely monitor the company's ability to execute its plans and the potential impact on future warrant conversions.