Refex Renewables & Infrastructure reported a consolidated Q2 FY27 net profit of Rs 23.73 crore, swinging from a loss in the previous year. However, the auditor has flagged significant concerns regarding the company's ability to continue as a going concern due to fully eroded net worth. The company is also facing a legal dispute over its Kolhapur CBG plant. While divestment gains boosted the bottom line, investors should remain cautious about the long-term solvency risks and ongoing litigation.
Refex Renewables Q2 FY27 Performance and Auditor Concerns
Consolidated Net Profit: Rs 23.73 crore (vs. Rs 14.32 crore loss in Q2 FY26).
Auditor Warning: Full erosion of net worth casts doubt on the company as a going concern.
Reader Takeaway: Improved consolidated profitability is overshadowed by significant auditor concerns regarding solvency and pending legal disputes.
What just happened
Refex Renewables & Infrastructure Limited reported a consolidated net profit of Rs 23.73 crore for the quarter ended September 30, 2026, compared to a loss of Rs 14.32 crore in the same period last year. Revenue from operations also rose to Rs 16.73 crore from Rs 14.28 crore. The profitability was significantly supported by an exceptional gain of Rs 23.78 crore arising from liability write-backs and asset restructuring, along with a Rs 12.67 crore gain from the divestment of its subsidiary, Ishaan Solar Power Private Limited.
Why this matters
Despite the improved bottom line, the statutory auditor has issued a warning regarding the company's ability to continue as a 'going concern.' The auditor highlighted that the company's net worth has been fully eroded as of September 30, 2026. Management has stated that it is pursuing new business opportunities and has secured a letter of support from promoter shareholders to navigate these financial challenges.
The backstory
On August 14, 2026, the company underwent a change in control, becoming a subsidiary of Refex Holding Private Limited. Additionally, the company is involved in a legal dispute with Warana Sugar Limited regarding its Compressed Bio Gas (CBG) plant in Kolhapur. Warana Sugar has restricted access to the facility, citing dues of Rs 18.48 crore, while the company maintains these claims were already settled at the time of the plant's acquisition in August 2025.
Risks to watch
Investors should track the legal resolution of the Kolhapur CBG plant dispute, which remains sub-judice. The cessation of operations at this plant presents an unquantifiable financial risk. Furthermore, the company's long-term sustainability depends heavily on its ability to reverse the erosion of its net worth and stabilize operations through its restructuring efforts.
What to track next
Watch for further communications regarding promoter support and any updates on the ongoing legal proceedings at the Kolhapur plant, as these will directly influence the company’s operational stability.