Zenith Fibres Limited , a manufacturer of manmade fibers and operator of wind turbines, has reported a net loss for the quarter ended September 30, 2025, reflecting challenging market conditions in the fiber industry.

Financial Performance

The company's financial results for Q2 FY26 reveal:

Zenith Fibres reported a net loss of Rs 5.78 crore for Q2 FY26, compared to a net profit of Rs 37.82 crore in the previous quarter and Rs 69.46 crore in the same quarter last year. The company's revenue from operations declined to Rs 934.79 crore from Rs 972.02 crore in the preceding quarter, representing a decrease of 3.83%.

Segment Performance

The company operates in two segments:

1. Manmade Fiber: This segment reported a loss before tax and interest of Rs 104.92 crore for the quarter.
2. Wind Mill: The wind power generation segment generated a profit of Rs 20.88 crore, providing some offset to the losses in the main business.

Expenses and Cost Pressures

Total expenses for the quarter stood at Rs 1,019.15 crore, with the cost of materials consumed being the largest component at Rs 583.52 crore. The increase in expenses, coupled with the decline in revenue, contributed to the quarterly loss.

Half-Year Performance

For the half-year period ended September 30, 2025:

• The company posted a net profit of Rs 32.04 crore
• Revenue from operations was Rs 1,906.81 crore

Balance Sheet Highlights

As of September 30, 2025:

• Total assets stood at Rs 6,070.40 crore
• Cash and cash equivalents were Rs 1,418.54 crore
• Total equity was Rs 5,677.18 crore

Market Conditions

The financial statements indicate that Zenith Fibres is facing headwinds in its core manmade fiber business, which may be attributed to broader market conditions affecting the textile industry.

Business Segment Analysis

The contrasting performance of the company's two business segments suggests that diversification into wind power generation may be providing some stability to overall operations. The manmade fiber segment's performance appears to be closely tied to global textile demand and raw material prices.

Zenith Fibres Limited, a leading manufacturer of Polypropylene Staple Fiber, has encountered a significant financial setback as its insurance claim for a failed windmill generator in Gujarat was rejected. The company, which had filed a claim for Rs 185.00 lakhs to cover the restoration costs of the generator, is now considering legal action to recover the incurred expenses.

Insurance Claim Rejection

The insurance company's decision to reject the claim came through a repudiation letter. This rejection follows a series of events that began with the initial notification of an estimated loss of Rs 200.00 lakhs to the insurer. Despite the completion of the inspection process by an appointed surveyor, Zenith Fibres was unable to realize any amount under the policy.

Windmill Restoration and Costs

The windmill, located at Vejalpar, Village Khakhrechi, Taluka Maniya-Miyana, District Morbi, Gujarat, experienced a temporary disruption in power generation. Zenith Fibres took swift action to restore operations, replacing the damaged generator with a new one. The restoration process allowed the windmill to resume power generation.

The actual cost incurred for the restoration amounted to Rs 185.00 lakhs, a significant expense that the company had initially expected to be covered by its insurance policy.

Impact on Operations

Despite the challenges posed by the generator failure, Zenith Fibres reported that its core business operations remained unaffected. The company's production of Polypropylene Staple Fiber continued without interruption during the windmill's downtime, demonstrating the resilience of its manufacturing processes.

Next Steps

In response to the insurance claim rejection, Zenith Fibres is taking proactive measures to protect its interests. The company has announced that it is in the process of seeking legal opinion to contest the rejection and recover the costs incurred for the generator's restoration and repair.

Dharati Bhavsar, Company Secretary of Zenith Fibres Limited, confirmed in a regulatory filing that the company is exploring legal avenues to address this matter and safeguard its rights.

Conclusion

The rejection of the insurance claim presents a financial challenge for Zenith Fibres Limited. As the company pursues legal options, stakeholders will be watching closely to see how this situation unfolds and its potential impact on the company's financial performance in the coming quarters.

Zenith Fibres Limited continues to operate its facilities, including the restored windmill in Gujarat, as it navigates this unexpected financial hurdle.