Gammon India Board Approves Q3 FY25 Results; Auditors Raise Concerns
Gammon India reported a standalone net loss of ₹316.29 crore for Q3 FY25, widening from ₹245.22 crore YoY. Consolidated net loss for the quarter was ₹322.18 crore, up from ₹276.75 crore YoY. Auditors issued a qualified conclusion, citing uncertainties regarding claims, disputed penal interest, and material going concern issues.
The qualified audit report and the material uncertainty related to going concern are significant factors that can heavily influence investor confidence and the company's future operations and financial stability.
The company reported significant losses in both standalone and consolidated results, which have widened year-on-year. The auditors' qualified conclusion and concerns about material uncertainty relating to going concern indicate substantial financial and operational challenges.
Gammon India Limited announced the outcome of its Board Meeting held on June 11, 2025, wherein the Un-Audited Standalone and Consolidated Financial Statements for the quarter and nine months ended December 31, 2024, were approved. The financial results were reviewed by the Audit Committee and subsequently taken on record by the Board, along with the Limited Review Report from the Statutory Auditors. The company's standalone net loss after tax for the quarter was ₹316.29 crore, compared to a loss of ₹245.22 crore in the same period last year. For the nine months ended December 31, 2024, the standalone net loss after tax was ₹842.14 crore, versus ₹811.69 crore in the prior year. Consolidated net loss after tax for the quarter stood at ₹322.18 crore, widening from ₹276.75 crore in the corresponding quarter of the previous year. The nine-month consolidated net loss after tax was ₹822.82 crore, compared to ₹1,530.00 crore in the previous year.
The Statutory Auditors have issued a qualified conclusion on the financial results. Key concerns raised include the recoverability of Rs. 30.00 crore in claims evaluated by an independent expert, where the auditors could not comment on realization due to prolonged delays. Additionally, the auditors highlighted penal interest and charges of Rs 95.35 crore levied by lenders, which the management is disputing, and the impact of this dispute on the financial results remains uncertain. The auditors also noted a material uncertainty relating to the going concern assumption due to the company's liquidity crunch, liabilities exceeding assets by Rs 11,188.57 crore (standalone) and Rs 12,246.48 crore (consolidated), NPA status with lenders, and pending restructuring plans. Despite these challenges, the management continues to believe the going concern assumption is intact, awaiting a consensus from lenders on a revised restructuring proposal supported by a prospective investor.
The consolidated financial results also reflect a qualified report from the auditors of a subsidiary, Ansaldo Caldaie Boilers India Limited (ACBI), regarding Rs. 16.64 crore in share application money received that has not been allotted or refunded as per regulations. Furthermore, the auditors of several other subsidiaries have also highlighted material uncertainties related to going concern. The company is primarily engaged in the "Construction and Engineering" segment.
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