Zenith Steel Pipes & Industries Limited has announced its financial results for the first quarter, reporting a profitable performance with improved revenue.

Financial Highlights

Quarterly Performance

Zenith Steel Pipes & Industries Limited demonstrated a strong start to the quarter. The company's total income from operations reached Rs. 2,544.76 lakh. This performance indicates a robust demand for the company's products and services.

The company's profitability remained solid, with both net profit before tax and after tax standing at Rs. 97.94 lakh for the quarter. This figure suggests effective cost management and operational efficiency.

Earnings Per Share

The basic and diluted earnings per share for continuing operations were reported at Rs. 0.07, reflecting the company's ability to generate returns for its shareholders.

Board Approval and Audit Review

The unaudited standalone and consolidated financial results were approved by the Board of Directors. These results underwent a limited review by the company's statutory auditors, ensuring compliance with regulatory requirements.

Consolidated Results

The consolidated financial results mirrored the standalone figures, indicating consistent performance across the company's operations.

Publication of Results

In adherence to regulatory requirements, Zenith Steel Pipes & Industries Limited published the extract of its financial results in newspapers. This move demonstrates the company's commitment to transparency and timely disclosure of financial information to its stakeholders.

The positive first-quarter results suggest an encouraging start for Zenith Steel Pipes & Industries Limited, with improved performance compared to the previous year. Investors and stakeholders will likely be watching closely to see if this trend continues in the coming quarters.

Zenith Steel Pipes & Industries Limited , a prominent player in the steel pipe industry, has released its unaudited financial results for the first quarter, revealing a complex financial landscape marked by significant challenges and strategic changes.

Financial Performance and Concerns

The company's Q1 results have been overshadowed by several financial concerns highlighted in the auditor's review. The review pointed out:

• Material non-compliance with deposit regulations
• Unconfirmed balances requiring reconciliation
• Frozen bank accounts with a provision of Rs. 41.07 lakhs

Most notably, the auditors raised doubts about Zenith Steel's ability to continue as a going concern, citing fully eroded net worth.

Despite these challenges, Zenith Steel reported a positive development in its financial statement. The company wrote back provisions totaling Rs. 622.17 lakhs during the quarter, which was recognized as other income. This move potentially indicates efforts to improve the company's financial position.

Strategic Moves and Debt Management

In a significant development, Zenith Steel has entered into a Memorandum of Understanding (MOU) with Tribus Real Estate Pvt. Ltd. (TREPL) for the takeover of its secured bank loans amounting to Rs. 16,884.92 lakhs. Under this arrangement, TREPL will:

• Negotiate settlements with lending banks and Asset Reconstruction Companies (ARCs)
• Gain rights over the secured assets until repayment is made by Zenith Steel

However, the company continues to face pressure from its lenders. A consortium of banks has initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for recovery of outstanding dues totaling Rs. 19,319.00 lakhs. The banks have taken symbolic possession of certain immovable properties at Zenith Steel's Khopoli unit, with the matter currently pending before the Debt Recovery Tribunal in Pune.

Corporate Governance and Compliance

In a move to strengthen its corporate governance, Zenith Steel's board has approved several key changes:

1. Appointment of M/s. Varun Kabra & Associates as the new Secretarial Auditor for a five-year term, subject to shareholder approval
2. Resignation of the previous Secretarial Auditor, M/s. Anil Somani & Associates
3. Adoption of updated codes of conduct for trading and fair disclosures of unpublished price-sensitive information

These changes come in the wake of past regulatory issues. The company was previously prohibited from accessing the securities market for three years by SEBI for violations related to Global Depositary Receipts (GDR) issuance. While this order was later modified, SEBI has filed a civil appeal in the Supreme Court, which was admitted in January 2024.

Looking Ahead

Zenith Steel Pipes & Industries Limited faces a challenging road ahead as it grapples with financial difficulties, regulatory scrutiny, and debt management issues. The company's ability to successfully negotiate with its lenders, improve its financial health, and maintain compliance with regulatory requirements will be crucial for its future prospects. Stakeholders will be closely watching how the management navigates these challenges in the coming quarters.