Sadbhav Engineering Board Approves Q2 Results, Auditor Resigns
Sadbhav Engineering reported a standalone loss of ₹859.76 lakhs for Q2 FY27 and ₹1,858.97 lakhs for H1 FY27. The company's statutory auditors, M/s. Manubhai & Shah LLP, resigned citing reduced operational activities. Auditors issued a qualified conclusion on the financial results, raising concerns about the recoverability of significant receivables and contract assets, and a material uncertainty regarding the company's going concern status.
The qualified audit opinion, coupled with the resignation of auditors and ongoing concerns about going concern and asset recoverability, significantly impacts investor confidence and the company's financial standing.
The company reported losses for the quarter and half-year, and the statutory auditors issued a qualified conclusion, highlighting material uncertainties and concerns about the recoverability of significant assets.
Sadbhav Engineering Limited's Board of Directors convened on November 4, 2026, to consider and approve the standalone and consolidated unaudited financial results for the quarter and half-year ended September 30, 2026. The board also approved the resignation of the company's statutory auditors, M/s. Manubhai & Shah LLP, effective November 4, 2026. The auditors cited a significant reduction in the company's operational activities as the reason for their resignation, stating there were no other material reasons.
The financial results presented showed a net loss for the quarter and half-year ended September 30, 2026. The standalone unaudited financial results for the quarter ended September 30, 2026, reported a loss of ₹859.76 lakhs, compared to a loss of ₹994.61 lakhs in the same period of the previous year. For the half-year ended September 30, 2026, the standalone loss was ₹1,858.97 lakhs, an improvement from the ₹973.49 lakhs loss in the prior year's half-year. Consolidated results also indicated losses for both periods.
The limited review report by the statutory auditors, M/s. Manubhai & Shah LLP, expressed a qualified conclusion on the financial results. Key concerns highlighted include the recoverability of outstanding loans, trade receivables, and other receivables from step-down subsidiary Rohtak Panipat Tollway Private Limited (RPTPL), and the recoverability of contract assets amounting to ₹35,019.32 lakhs from various projects. Additionally, the auditors noted a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern, despite the implementation of a Restructuring Plan.
The company's financial statements also detail significant exceptional items and ongoing legal proceedings and disputes, including those related to RPTPL's concession agreement termination and contract assets. The company has opted for the new concessional tax regime under Section 115BAA of the Income-tax Act, 1961, leading to the derecognition of a Deferred Tax Asset.
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