Purohit Construction reported a standalone net loss of ₹78.75 lakh for the quarter ended June 2026, representing a significant deterioration from the net loss of ₹9.98 lakh recorded in the corresponding quarter of the previous year. According to the latest financial results, this marks a substantial increase in losses for the construction company during the first quarter of fiscal 2026-27. The company recorded no revenue from operations during the period, reflecting its current stage of real estate development activities.
The widening loss was primarily driven by a one-time provision of ₹69.45 lakh related to a Goods and Services Tax (GST) demand. As reported in the latest financial results, this charge significantly impacted the bottom line, as operating expenses remained relatively stable at ₹78.62 lakh against negligible income. During Q3FY26, the company received a GST demand order for FY18 totaling ₹4.16 crore, comprising ₹2.08 crore for input tax credit disallowance and ₹2.08 crore in penalties and interest. Initially, the company did not recognize a provision, citing strong legal grounds. However, the Commissioner (Appeals) rejected Purohit Construction's appeal on June 24, 2026, leading to the current provision recognition.
The company's balance sheet reflects a negative equity position of ₹-378.41 lakh under 'Other Equity', bringing total equity down to ₹62.15 lakh from ₹140.91 lakh at the end of FY26. This erosion is directly attributable to the accumulated losses from the GST provision. Additionally, non-current liabilities surged to ₹77.31 lakh from ₹7.86 lakh in March 2026, largely due to the new GST provision. While cash reserves remain thin at ₹1.24 lakh, the company raised ₹6.25 lakh in short-term borrowings during the quarter to maintain liquidity.
Management intends to contest the GST order before the Goods and Services Tax Appellate Tribunal (GSTAT). The company's auditors, BNPS and Associates LLP, conducted a limited review of the unaudited standalone financial results and included an 'Emphasis of Matter' paragraph drawing attention to the GST dispute and the associated provision, noting that the ultimate outcome depends on appellate authorities. The company plans to appeal the GST order before GSTAT, which could significantly impact the company's financial position if the full ₹4.16 crore GST liability is enforced.
