Kandagiri Spinning Mills reported a standalone net loss of ₹65.86 lakh for Q1FY27, representing a 44.6% improvement from the net loss of ₹118.82 lakh recorded in the corresponding quarter of FY26. According to the latest financial results, the company's total income dropped to ₹15.76 lakh from ₹62.19 lakh in Q1FY26, reflecting a 74.6% decline in revenue from operations. The Salem-based textile manufacturer's financial performance showed mixed results with significant revenue challenges during the quarter.
The company experienced a severe revenue contraction of 74.7%, with sales declining to ₹15.72 lakh in Q1FY27 compared to ₹62.15 lakh in the same quarter of the previous fiscal year. As reported in the latest financial results, this substantial revenue decline indicates significant operational challenges faced by the spinning mill during the quarter. The company's total expenses fell more dramatically to ₹81.62 lakh from ₹181.01 lakh in Q1FY26, with the cost of materials consumed decreasing to ₹15.27 lakh from ₹58.25 lakh in the prior year period, reflecting better cost management despite reduced trading volumes in the yarn business.
Despite the revenue decline, the company managed to contain its loss primarily through lower finance costs of ₹46.51 lakh compared to ₹41.66 lakh in the previous year, and reduced employee benefits expenses. The company's operating profit margin (OPM) improved significantly with loss before tax declining to ₹65.86 lakh from ₹118.82 lakh in the corresponding quarter of the previous year. The earnings per share (EPS) improved to -₹1.71 from -₹3.08 in Q1FY26, indicating better cost control measures implemented by the company.
Statutory auditors S S A L & Associates issued a qualified opinion citing material uncertainty regarding the company's ability to continue as a going concern. The auditors noted that the company incurred a loss before tax of ₹65.86 lakh during the quarter and has experienced net worth erosion as of June 30, 2026. However, management assured continued promoter fund support and stated that promoters have continued to infuse funds, justifying the continued adoption of the Going Concern concept in preparing the financial statements. With paid-up equity capital standing at ₹385.75 lakh and other equity showing a negative balance of ₹1,436.41 lakh at the end of FY26, the reliance on promoter fund infusion remains essential for the company's immediate survival.
