Dharani Finance Ltd reported a decline in PAT to Rs 55.46 lakh for FY 2025-26 from Rs 83.79 lakh the previous year. The company's annual report includes a qualified opinion from auditors regarding an unrecovered Rs 200 lakh Inter-Corporate Deposit. The auditor warns that failure to recover these funds or infuse fresh capital could jeopardize the company’s ability to meet RBI’s Net Owned Funds requirements and its status as an NBFC.
Dharani Finance FY 2025-26 Performance and Audit Concerns
PAT: Rs 55.46 Lakh | Revenue: Rs 139.80 Lakh
Reader Takeaway: Improved loan book offset by auditor warnings on liquidity and potential non-compliance with RBI capital norms.
What just happened
Dharani Finance Ltd has released its Annual Report for the fiscal year 2025-26, highlighting a dip in annual profitability and a qualified audit opinion. The company recorded a Profit After Tax (PAT) of Rs 55.46 lakh, down from Rs 83.79 lakh in the previous year. Revenue from operations remained relatively flat at Rs 139.80 lakh. Despite the profit decline, the company grew its loan book to Rs 896.00 lakh from Rs 838.44 lakh.
Auditor's Qualified Opinion
Statutory auditor Srivatsan & Associates issued a qualified opinion, citing significant concerns regarding a Rs 200 lakh Inter-Corporate Deposit (ICD) given to M/s Aryav Exports Private Limited. The company has ceased accruing interest on this ICD since 2017. The auditor noted that if this amount were fully provisioned, the company’s Net Owned Funds would fall below the mandatory RBI threshold for an NBFC, casting doubt on its going-concern status.
Why this matters
The auditor’s warning is critical for investors as it directly ties the company's future as an operating NBFC to the successful recovery of legacy dues or a fresh capital infusion. Without such measures, the company risks failing to meet regulatory compliance standards required to hold its NBFC license.
Business and Operational Updates
Management maintains a cautiously optimistic outlook, targeting expansion within Tamil Nadu. However, to conserve liquidity, the board has not recommended any dividend for the fiscal year. The report also discloses significant related party exposure, including Rs 328 lakh owed by Dharani Developers Private Limited and Rs 240 lakh by Appu Hotels Limited.
What to track next
Investors should monitor official disclosures regarding any capital infusion plans or legal progress on the recovery of the Rs 200 lakh deposit. Compliance with RBI's Net Owned Funds (NOF) criteria remains the primary indicator of the company's long-term viability.