Steelco Gujarat posts ₹37 cr loss as debt-equity ratio hits 83.47
Revenue growth failed to offset ballooning costs, pushing the company's net worth into negative territory at ₹-77.97 crore.
What's new
- FY26 net loss widened to ₹37.27 crore from ₹20.54 crore.
- Net worth is now negative at ₹-77.97 crore.
- Board approved a ₹14.90 crore rights issue for May 2026.
Why this matters
The company is in a state of severe financial distress with a debt burden of ₹226.80 crore against assets of ₹245.49 crore. A rights issue of ₹14.90 crore is a drop in the bucket compared to the scale of its negative net worth.
What we're watching
- Whether the ₹14.90 crore rights issue attracts sufficient subscription.
- Any further deterioration in the debt-equity ratio.
- The company's ability to continue as a going concern.
The full read
Steelco Gujarat's FY26 results reveal a company in deep financial distress. While revenue from operations surged to ₹58.53 crore from ₹4.18 crore in the prior year, the gains were wiped out by a massive rise in raw material and finance costs. Total expenses reached ₹96.47 crore, leading to a net loss of ₹37.27 crore. The balance sheet is now in critical condition, with net worth turning negative at ₹-77.97 crore. The debt-equity ratio has ballooned to 83.47, up from 2.28 in FY25. With a total debt of ₹226.80 crore against assets of ₹245.49 crore, the company is effectively operating on thin margins of equity. The board has approved a ₹14.90 crore rights issue for May 2026, but given the scale of the losses and the debt load, this capital infusion appears insufficient to resolve the company's underlying solvency issues.
Questions answered
- How did revenue change year-over-year?
- Revenue from operations rose to ₹58.53 crore in FY26 from ₹4.18 crore in FY25. This growth was entirely consumed by rising raw material and finance costs.
- What is the current state of the company's balance sheet?
- The company has a negative net worth of ₹-77.97 crore. Its total debt stands at ₹226.80 crore against total assets of ₹245.49 crore.
- How does the debt-equity ratio compare to last year?
- The ratio exploded to 83.47 for FY26, compared to 2.28 in the previous year.
- What is the purpose of the approved rights issue?
- The board approved a rights issue of up to ₹14.90 crore in May 2026 to shore up capital. The company faces an urgent need for liquidity given its current financial position.