Welcast steels Limited has reported substantial losses for the third quarter of FY26, marking a challenging period following its decision to permanently shut down operations at its primary manufacturing facility.

Financial Performance Overview

The company's Q3 FY26 results reveal significant deterioration in financial performance across key metrics:

The company recorded a net loss of ₹315.73 lakhs for Q3 FY26, compared to a profit of ₹11.29 lakhs in the corresponding quarter of the previous year. Revenue from operations plummeted to ₹256.60 lakhs from ₹2,307.68 lakhs in Q3 FY24, representing a decline of nearly 89%.

Nine-Month Performance

For the nine months ended December 31, 2025, Welcast Steels reported comprehensive losses:

Factory Closure and Exceptional Items

The company's Board of Directors decided on October 15, 2025, to permanently close its industrial establishment located at Plot No. 15, Phase 1, Peenya Industrial Area, Bangalore, with effect from December 15, 2025. This closure has resulted in exceptional expenses of ₹28.95 lakhs for Q3 FY26 and ₹328.19 lakhs for the nine-month period.

The closure has necessitated significant adjustments in the company's financial reporting approach. The financial statements for the current period have not been prepared on a going concern basis, and the company has recognized closure compensation and other related expenses under the Industrial Relations Code 2020.

Impact on Financial Reporting

Due to the factory closure, several accounting adjustments have been implemented:

• Non-financial assets are measured at the lower of carrying value and fair value less costs to sell
• Employee benefit expenses include ₹46.37 lakhs for retained critical employees who are expected to be terminated
• Financial assets and liabilities continue to be recognized at fair value or amortized cost
• No deferred tax adjustments have been carried out for the nine-month period

Business Operations

Welcast Steels manufactures alloy steel cast grinding media and operates solely in India. The company has a single reportable segment, and sales to one major customer accounted for ₹1,631.78 lakhs during the period. AIA Engineering Limited holds 74.85% of the company's share capital with 4,77,661 equity shares.

The Board of Directors is currently evaluating the future course of the company's activities following the permanent closure of its manufacturing operations.

Welcast Steels Limited , a manufacturer of alloy steel cast grinding media, has reported a substantial net loss and announced the permanent closure of its only factory, signaling a major shift in the company's operations.

Financial Performance

For the quarter ended September 30, 2025, Welcast Steels reported a net loss of Rs 625.56 crore, compared to a loss of Rs 679.00 crore in the previous quarter. The company's revenue from operations declined to Rs 2,065.01 crore from Rs 2,276.74 crore in the prior quarter.

Factory Closure and Future Plans

In a significant development, the company's Board has decided to permanently close its industrial establishment located at Plot No. 15, Phase 1, Peenya Industrial Area, Bangalore, effective December 15, 2025. This decision has led to the financial results not being prepared on a going concern basis.

The closure has resulted in exceptional expenses of Rs 209.24 crore, which include:

• Closure compensation
• Gratuity
• Leave encashment liabilities

The Board of Directors is currently in the process of deciding the future course of the company's activities.

Financial Implications

The company's financial statements for the quarter and half-year ended September 30, 2025, reflect the impact of this decision:

• Non-financial assets have been measured at the lower of carrying value and fair value less costs to sell.
• Financial assets and liabilities continue to be recognized at fair value or amortized cost, adjusted for any loss allowances.
• No adjustments have been made for contingent liabilities considered not probable.
• Deferred tax adjustments have been deferred to the end of the financial year.

Market Position

Welcast Steels operates solely in India, specializing in the manufacture of alloy steel cast grinding media. The closure of its only manufacturing facility raises questions about the company's ability to continue its core operations.

Investor Considerations

With the permanent closure of its factory and significant losses, Welcast Steels faces a challenging period. Investors and stakeholders may want to closely monitor any announcements regarding the company's future direction and potential restructuring plans.

As the situation develops, it will be important to watch for any announcements regarding asset sales, potential new business ventures, or other strategic moves that could impact the company's future and shareholder value.