Sarla Performance Fibers Limited announced that its board of directors has approved the sale of preference shares in its wholly owned subsidiary during a meeting held on February 04, 2026. The decision involves the divestment of preference shareholding in Sarla Flex Inc., USA, while maintaining complete equity control of the subsidiary.

Transaction Details

The board approved the sale of specific preference shares with substantial face values but at a significantly reduced consideration price.

Buyer and Transaction Structure

The preference shares will be sold to STAR EXIM GENERAL TRADING L.L.C., which does not belong to the promoter, promoter group, or group companies. The transaction is structured outside any scheme of arrangement and does not constitute a related party transaction.

Subsidiary Performance and Impact

Sarla Flex Inc., USA has remained non-operational since 2017, contributing minimally to the parent company's consolidated performance.

Continued Ownership Structure

Despite the sale of preference shares, Sarla Performance Fibers Limited will continue to maintain complete operational control of its US subsidiary. The company emphasized that upon completion of the transaction, it will cease to hold any preference shares in Sarla Flex Inc., USA, but will continue to hold 100% of the equity share capital, ensuring the subsidiary remains wholly owned.

Board Meeting Details

The board meeting was conducted on Wednesday, February 04, 2026, commencing at 06:38 P.M. and concluding at 07:00 P.M. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with all required documentation provided to both NSE and BSE.

Sarla Performance Fibers delivered mixed Q3 results, showcasing strong net profit growth alongside declining EBITDA performance. The company demonstrated contrasting operational trends while navigating challenging market conditions.

Financial Performance Overview

The company's Q3 results reflected divergent trends across key financial metrics. While profitability at the net level showed remarkable improvement, operational profitability faced pressure during the quarter.

EBITDA Performance Decline

Sarla Performance Fibers experienced a significant decline in operational profitability with EBITDA falling to ₹166 million compared to ₹240 million in the same quarter of the previous year. The EBITDA margin compressed substantially to 18.67% from 24.00%, indicating operational challenges despite overall profitability improvements.

Net Profit Surge

Despite EBITDA pressures, the company achieved remarkable net profit growth of 62.03% to ₹192 million compared to ₹118.5 million in the corresponding quarter last year. This substantial bottom-line improvement suggests effective management of non-operational expenses and financial optimization.

Revenue and Margin Dynamics

The company faced revenue headwinds with Q3 revenue declining 11.31% to ₹886 million from ₹999 million year-over-year. The combination of lower revenue and reduced EBITDA margins reflects challenging operational conditions, though the company maintained strong net profitability through effective cost management strategies.