Gammon India Limited: Revised Q2 FY25 Financials Show Losses, Going Concern Uncertainty
Gammon India Limited reported a revised net loss of ₹173.65 crore for Q2 FY25, down from ₹342.80 crore YoY. Total income rose to ₹99.49 crore from ₹17.60 crore. Auditors flagged material uncertainty regarding going concern and qualified their report due to issues with claims, penal interest, and subsidiary finances.
The qualified audit report and the explicit mention of material uncertainty relating to going concern have a significant impact on the company's financial health and investor confidence.
The company reported significant losses and qualified financial results with material uncertainty regarding its ability to continue as a going concern, indicating a negative financial outlook.
Gammon India Limited announced the outcome of its Board Meeting held on August 2, 2025, where it approved the Un-Audited Revised Consolidated Financial Statements for the quarter and half-year ended September 30, 2024. The company reported a net loss after tax of ₹173.65 crore for the quarter ended September 30, 2024, compared to a loss of ₹342.80 crore in the same quarter of the previous year. For the half-year ended September 30, 2024, the net loss after tax was ₹489.48 crore, against a loss of ₹649.85 crore in the corresponding period last year.
Total income for the quarter ended September 30, 2024, stood at ₹99.49 crore, a significant increase from ₹17.60 crore in the same quarter of the previous year. However, total expenses were ₹273.00 crore for the quarter, leading to a loss before exceptional items and tax of ₹173.51 crore. Finance costs remained substantial at ₹296.27 crore for the quarter.
The company's financial results are qualified by the statutory auditors due to several matters. These include uncertainty regarding the recoverability of claims amounting to ₹30.00 crore, disputes over penal interest and charges from lenders totaling ₹64.61 crore for the quarter and ₹743.28 crore cumulatively, and issues with a subsidiary regarding share application money received. Furthermore, the auditors highlighted material uncertainty relating to the going concern assumption for both the holding company and its subsidiaries, citing liquidity crunch, current liabilities exceeding current assets by ₹11,932.61 crore as of September 30, 2024, and pending restructuring plans with lenders.
The revised financial statements were issued due to a clerical error in linking the net gain/loss on fair value of equity instruments through OCI, which has now been rectified. The company is actively engaged with lenders for a resolution plan, with a prospective investor's proposal under consideration.
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