Bihar Sponge Iron Limited reported a FY26 profit of Rs. 11.33 crore despite a revenue decline to Rs. 245.48 crore. While the firm signed a new plant operating agreement with Amalgam Steel & Power Limited following a disruption by its former operator, the statutory auditor has qualified the results. Auditor Doogar & Associates highlighted significant unprovided interest on soft loans and penalties, stating that the company would have reported a loss if these were accounted for. Additionally, the company faces ongoing insolvency-related disputes, signaling a complex operational turnaround.
Bihar Sponge Iron FY26 Profit and Auditor Qualifications
Profit reported at Rs. 11.33 crore; Revenue stood at Rs. 245.48 crore.
Reader Takeaway: New plant operator onboarded, but auditor-flagged liabilities and insolvency litigation present significant recovery risks.
What just happened
Bihar Sponge Iron Limited held its Annual General Meeting to discuss results for FY 2025-26. The company reported a profit of Rs. 11.33 crore, rising from Rs. 10.40 crore in the previous year. However, annual revenue dipped to Rs. 245.48 crore compared to Rs. 319.42 crore in FY 2024-25. The company recently transitioned to a new Facility User Agreement with Amalgam Steel & Power Limited in March 2026 after the sudden exit of former operator Vanraj Steels Private Limited.
Why this matters
The auditor, M/s. Doogar & Associates, has issued a qualified opinion on the financial statements. They noted that failure to account for Rs. 82.72 crore in interest on government soft loans and a Rs. 2.15 crore coal penalty resulted in an inflated profit figure. The auditor explicitly mentioned that the company would have reported a net loss had these liabilities been recorded.
Risks to watch
Investors should monitor the ongoing insolvency proceedings initiated by Agarwal Coal Corporation and Gohil Enterprises. Furthermore, the legal standoff with the former plant operator (VSPL) remains unresolved. These legal and regulatory hurdles, combined with the plant's current renovation phase, suggest potential volatility in the company's path to operational stability.
What to track next
Watch for updates on the plant renovation progress under the new agreement with Amalgam Steel & Power and the outcome of the pending legal challenges regarding operational debts.