Gammon India Q1 FY27: Board Approves Unaudited Financial Results
Gammon India Limited approved unaudited standalone and consolidated financial results for Q1 FY27 ended June 30, 2026. The company faces material uncertainties regarding going concern, with current liabilities exceeding current assets by Rs. 12,988.80 crore (standalone) and Rs. 14,495.29 crore (consolidated). Significant amounts of penal interest and claims remain under dispute and negotiation.
The qualified auditor's report, material uncertainties about going concern, and substantial outstanding liabilities and disputes have a significant impact on the company's financial health and future prospects.
The auditor's report highlights significant financial distress, material uncertainties regarding going concern, ongoing disputes over penal interest, and pending claims, indicating a negative financial outlook.
Gammon India Limited announced the outcome of its Board Meeting held on August 10, 2026. The Board approved the unaudited Standalone and Consolidated Financial Statements for the quarter ended June 30, 2026, along with the Limited Review Report from the Independent Auditor. The financial results have been reviewed by the Audit Committee and are available on the company's website.
The independent auditor's report highlighted several points. Firstly, regarding claims from ongoing, completed, and terminated contracts, Rs. 10.00 crore has been retained as good and receivable, though the auditor could not comment on its realization due to prolonged time and non-crystallization. Secondly, penal interest and incremental charges levied by lenders amounted to Rs. 11.74 crore for the quarter, with a cumulative Rs. 923.28 crore outstanding. Of this, Rs. 403.50 crore is from lenders and Rs. 519.78 crore from CFM Assets Reconstruction Company Private Limited (ARC). The company is in discussions with lenders and ARC for settlement, with ARC considering waiving interest and penal charges, which is pending senior management approval.
The auditor also noted material uncertainties relating to going concern. The company's current liabilities exceed its current assets by Rs. 12,988.80 crore as of June 30, 2026. The company is finding it difficult to meet its financial obligations, and a resolution plan is under consideration by lenders. Trading in equity shares is suspended, and winding up petitions have been filed by creditors. The company is negotiating a proposal for waiver of interest and penal charges and a haircut on the principal amount, with positive discussions with ARC companies.
Furthermore, Rs. 532.91 crore is highlighted under trade receivables related to contract revenue where arbitration awards have been received, though clients have appealed against these awards. The company is confident of recovery, pending the final outcome of appeals and negotiations.
In the consolidated results, current liabilities exceed current assets by Rs. 14,495.29 crore. The report also mentions qualifications from subsidiary auditors regarding Rs. 16.64 crore of share application money from Ansaldo Caldaie S.P.A. which is yet to be allotted or refunded as per RBI directives.
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