Arshiya Ltd reported a Q3 FY26 loss of ₹0.0644 crore while under Corporate Insolvency Resolution Process (CIRP). The auditor issued a disclaimer of conclusion due to severe operational issues and lack of evidence. The company faces significant manpower deficiency and ongoing litigation, impacting its financial reporting and outlook.
Arshiya Ltd: Q3 FY26 Results Marred by Insolvency and Auditor's Disclaimer
Arshiya Limited has released its unaudited standalone financial results for the quarter and nine months ending December 31, 2025. Net Loss for Q3 FY26: ₹(0.0644) crore | Net Loss for 9M FY26: ₹(1.21) crore Reader Takeaway: Company faces insolvency proceedings and auditor uncertainty; future hinges on CIRP outcome. ## What just happened Arshiya Limited has reported its financial results for the third quarter and the first nine months of fiscal year 2026. During this period, the company recorded a net loss of ₹0.0644 crore for the quarter and a net loss of ₹1.21 crore for the nine-month period. Crucially, the company is currently undergoing the Corporate Insolvency Resolution Process (CIRP), with its board powers suspended and vested in a Resolution Professional. Adding to the concerns, the statutory auditor has issued a disclaimer of conclusion, meaning they could not verify the accuracy or provide an opinion on the financial statements. ## Why this matters For shareholders, these results signal a company in severe distress. The ongoing CIRP means the company's future is uncertain and controlled by a Resolution Professional. The auditor's disclaimer is a major red flag, indicating that the reported financial figures are not independently verifiable due to fundamental issues with evidence and operational continuity. Significant liabilities from invoked corporate guarantees and the NCLAT ruling on a demerger scheme further compound the uncertainty, making it difficult to assess the true financial health and future prospects of Arshiya Ltd. ## The backstory Arshiya Limited has been facing significant operational and financial challenges. The company's plight is highlighted by a severe manpower crisis, with its staff strength reduced to just 5 employees following the resignation of 50 out of 71 employees between July and August 2024. This drastic reduction has led to operational disruptions and delays in statutory reporting. Furthermore, the company is entangled in multiple litigations, including issues related to corporate guarantees worth ₹1,038.50 crore and the NCLAT's decision to declare a demerger scheme involving NCR Rail Infrastructure Limited as "non-est", necessitating accounting restatements. ## What changes now The current financial reporting is significantly impacted by the ongoing CIRP and the auditor's disclaimer. The company continues to operate as a going concern under the Resolution Professional. However, the ability to conduct essential financial processes like impairment testing for assets and recognizing expected credit losses is compromised. Any potential restructuring or resolution under CIRP will dictate the company's future operational and financial standing, with any reported figures needing careful scrutiny. ## Risks to watch The primary risks for Arshiya Ltd include the uncertainty surrounding the outcome of the CIRP, potential for further deterioration of operational capabilities due to extreme manpower deficiency, and the impact of ongoing litigations and contingent liabilities. The auditor's disclaimer severely limits the reliability of the reported financial data. There are also questions regarding the recognition of revenue due to a lack of executed contracts or customer acceptance. ## Auditor Remarks and Disclaimer Statutory auditor M/s ARTHA & Associates issued a **Disclaimer of Conclusion**. They could not obtain sufficient evidence for trade receivables, payables, and other balances. Significant human resource crisis (5 employees remaining) caused operational collapse. The company failed to conduct asset impairment testing and lacked expected credit loss recognition on disputed receivables. Recognition of ₹13.50 crore revenue is questioned due to a lack of executed contracts or customer acceptance. ## Context metrics (time-bound) For the quarter ended December 31, 2025: * Revenue from operations: ₹4.50 crore. * Net Profit/(Loss): ₹(0.0644) crore. For the nine months ended December 31, 2025: * Revenue from operations: ₹13.50 crore. * Net Profit/(Loss): ₹(1.21) crore. Invoked corporate guarantees amount to ₹1,038.50 crore. ## What to track next Investors should closely monitor the progress of the Corporate Insolvency Resolution Process (CIRP). Any updates on the resolution plan, potential asset valuations, and the management's ability to address the operational and legal challenges will be critical indicators for the company's future trajectory.
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