Artefact Projects reported a 7.6% drop in net profit to ₹94.30 lakh for the June 2026 quarter, primarily due to a new revenue recognition policy. The change, which recognizes revenue only after client approval, reduced reported sales by ₹5.18 crore and profits by ₹2.13 crore. Auditors also highlighted investments in two cooperative banks.
Artefact Projects Limited Financial Results - June 30, 2026 Quarter
Net Profit: ₹0.94 crore (₹94.30 lakh) vs ₹1.02 crore (₹101.81 lakh) Revenue from Operations: ₹3.17 crore (₹316.71 lakh) vs ₹2.21 crore (₹221.14 lakh) Reader Takeaway: New revenue policy boosts reporting accuracy but cuts current profit; watch investment recoverability. ## What just happened Artefact Projects Limited has reported its financial results for the quarter ending June 30, 2026. The company implemented a new, more conservative accounting policy for revenue recognition. Under this policy, revenue is now recognized only after receiving client approval and acceptance, a shift from the previous practice of using proforma invoices. ## Why this matters This accounting policy change significantly impacted the reported financials. It led to a reduction in reported sales by ₹5.18 crore (₹517.82 lakh) and a decrease in net profit by ₹2.13 crore (₹213.19 lakh) for the quarter. Consequently, net profit for the June 2026 quarter fell by 7.6% to ₹94.30 lakh, compared to ₹1.02 crore in the same period last year. Basic Earnings Per Share (EPS) also decreased to ₹1.30 from ₹1.40. ## The backstory The adoption of the new revenue recognition policy is a move towards greater compliance and more accurate financial reporting. While potentially beneficial for long-term clarity, it has created a short-term dip in reported earnings. The company also reported an increase in Work in Progress (WIP) by ₹3.05 crore, reflecting the timing of revenue recognition under the new policy. ## What changes now Shareholders can expect future financial reports to reflect this new accounting standard. This means reported revenues and profits may appear lower in the immediate periods following the change, but the figures should more accurately represent completed services and accepted client work. The company's management believes this will lead to greater stability in earnings over time. ## Risks to watch An 'Emphasis of Matter' from the statutory auditors highlights the carrying value of investments in Shri Ram Urban Co-operative Bank Ltd. (₹5.01 lakh) and Shri Anand Nagari Sahakari Bank Ltd. (₹3.51 lakh). Management asserts these investments are fully recoverable and no impairment provision is needed. However, this remains a point of attention for investors due to its mention by auditors, indicating a potential risk of future write-downs if management's assessment proves incorrect. ## Auditor Emphasis of Matter The statutory auditors' report includes an 'Emphasis of Matter' drawing attention to the management's assessment of the carrying value of investments. Specifically, investments totaling ₹5.01 lakh in Shri Ram Urban Co-operative Bank Ltd. and ₹3.51 lakh in Shri Anand Nagari Sahakari Bank Ltd. are mentioned. Management is confident in the full recoverability of these loan-linked investments, thus no impairment provision has been made. This matter requires continued investor vigilance. ## Context metrics (time-bound) * **Revenue from Operations (June 30, 2026):** ₹3.17 crore * **Revenue from Operations (June 30, 2025):** ₹2.21 crore * **Net Profit (June 30, 2026):** ₹0.94 crore * **Net Profit (June 30, 2025):** ₹1.02 crore * **Impact of Accounting Change - Sales Reduction:** ₹5.18 crore * **Impact of Accounting Change - Profit Reduction:** ₹2.13 crore
