Shivam Autotech Faces Financial Scrutiny Amidst Widening Losses and Negative Net Worth

Shivam Autotech Ltd has reported a net loss after tax of ₹81.33 crore for the financial year ended March 31, 2026. This marks a significant deterioration from the ₹48.04 crore loss recorded in the previous fiscal year.

What just happened

Shivam Autotech's revenue from operations for FY26 stood at ₹409.58 crore, a decrease of approximately 9.8% from ₹453.98 crore in FY25. The company's net worth has turned negative, standing at ₹40.68 crore as of March 31, 2026.

Why this matters

Auditors have included an 'Emphasis of Matter' paragraph in their report, drawing attention to the company's negative net worth and the excess of current liabilities over current assets. This signals serious doubts about Shivam Autotech's ability to continue as a going concern.

The backstory

The company's financial performance has weakened over the past year, with revenues declining and losses widening substantially. The auditor's concern is a direct reflection of these deteriorating financial metrics.

What changes now

Investors will be closely watching management's efforts to address the financial challenges. The company has received in-principle approval for issuing Optionally Convertible Debentures (OCDs) on a preferential basis, indicating a move to raise capital or restructure its finances.

Risks to watch

The primary risks include the company's technical insolvency due to negative net worth, liquidity pressures from current liabilities exceeding current assets, and the overarching uncertainty surrounding its ability to operate as a going concern.

Auditor and Management Commentary

Statutory auditor NSBP & Co. highlighted the ₹81.33 crore net loss, the ₹50.60 crore shortfall in current assets over liabilities, and the ₹40.68 crore negative net worth. Management, however, pointed to an EBITDA of ₹31.80 crore and continued fulfillment of debt obligations, asserting the going concern basis for financial reporting, supported by expectations of refinancing and improved operations.

Strategic Developments

Shivam Autotech secured BSE and NSE approval for issuing 12,000 OCDs on a preferential basis, with allotment completed in February 2026. This move aims to bolster the company's financial position.

Reader Takeaway: Widening losses and auditor concerns pose significant risk, countered by management's capital raising efforts.