Arshiya Ltd Faces Severe Distress as Auditors Issue Disclaimer on Q2 FY26 Results

Arshiya Limited reported a net loss of ₹1.51 crore for the quarter ended September 30, 2025. The company's financial results were released by the Resolution Professional (RP) with a significant 'Disclaimer of Conclusion' from its statutory auditors.

Reader Takeaway: Auditors' disclaimer signals extreme risk; ongoing insolvency process creates deep uncertainty.

What just happened

Arshiya Limited has released its unaudited standalone financial results for the second quarter of the fiscal year 2026. The company reported a net loss after tax of ₹1.51 crore (approximately ₹151.15 lakh). Revenue from operations stood at ₹4.50 crore (₹450 lakh), with total income at ₹4.71 crore (₹470.82 lakh).

Crucially, the statutory auditors, M/s Artha & Associates, were unable to provide a conclusion on these financial statements. They cited significant manpower constraints, limited availability of records, and challenges in verifying the completeness and validity of underlying data as reasons for issuing a 'Disclaimer of Conclusion'.

Why this matters

The disclaimer of conclusion by auditors is a serious red flag, indicating that the reported financial figures lack independent verification. This makes it difficult for investors to assess the true financial health of Arshiya Limited. The company is currently undergoing Corporate Insolvency Resolution Process (CIRP), adding another layer of uncertainty.

Significant operational disruptions, including mass employee resignations and termination of warehouse sub-lease agreements, highlight the company's precarious state. The lack of verifiable financial data amid these challenges points to a high-risk investment scenario.

The backstory

Arshiya Limited has been under CIRP since April 23, 2024. The company experienced a severe blow in July-August 2024 when 50 out of 71 employees resigned, drastically reducing its workforce to just 6. This attrition has hampered its ability to conduct normal operations and financial reporting.

Furthermore, termination notices for several warehouse sub-lease agreements were received in July 2024, impacting its business agreements and operational capacity. The company also recognized revenue of ₹9.00 crore without executed contracts or customer acceptance, which auditors flagged.

What changes now

Investors must understand that the reported financials lack auditor validation. The company's future hinges on the ongoing CIRP proceedings and the decisions made by the Committee of Creditors. The operational capacity is severely diminished, and significant liabilities, including guaranteed amounts totaling approximately ₹1,038.50 crore, have not been fully recognized.

Risks to watch

Key risks include the inability to secure a resolution plan through CIRP, further operational deterioration due to minimal staff, potential write-offs of equity, and the ultimate realization of unrecognised liabilities. The lack of auditor conclusion on financials poses the most immediate risk for any potential investor or stakeholder.

Peer comparison

Companies undergoing CIRP typically face significant scrutiny and investor caution. Arshiya Limited's situation is exacerbated by its mass employee attrition and the auditor's inability to form a conclusion, setting it apart from peers who might be in resolution but have clearer financial reporting.

Context metrics (time-bound)

• Employee Strength: Reduced from 71 to 6.
• CIRP Commencement: April 23, 2024.
• Mass Resignation: July 30 - August 2, 2024.
• Warehouse Lease Terminations: July 2024.

What to track next

Investors should closely monitor the progress of the CIRP, any potential resolution plans submitted, and updates from the National Company Law Tribunal (NCLT). Any further developments regarding liabilities or operational capabilities will be critical.