Sarla Performance Fibers Reports ₹59.7 Cr FY26 Loss, Recommends Dividend

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AuthorRiya Kapoor|Published at:
Sarla Performance Fibers Reports ₹59.7 Cr FY26 Loss, Recommends Dividend
Overview

Sarla Performance Fibers Ltd reported a consolidated net loss of ₹59.72 crore for the financial year ended March 31, 2026, on revenues of ₹401.23 crore. The company's statutory auditors issued a qualified audit opinion, citing pending regulatory approvals for the sale of investment in its subsidiary, Sarla Flex Inc. (USA). Despite the loss, the Board recommended a final dividend of ₹2 per equity share, with promoters waiving their rights. The company also reappointed its Internal and Cost Auditors.

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Sarla Performance Fibers Reports ₹59.7 Cr Loss for FY26, Recommends Dividend Amid Qualified Audit Opinion

Sarla Performance Fibers Ltd. has announced a consolidated net loss of ₹59.72 crore for the fiscal year ended March 31, 2026. This follows revenue from operations totaling ₹401.23 crore during the same period.

The substantial loss was largely driven by the sale of preference shares in its non-operational U.S. subsidiary, Sarla Flex Inc. The company approved this divestment in February 2026 for USD 121,000, marking a significant discount from the shares' carrying value of ₹7,824.85 lakh. Sarla Flex Inc. has remained inactive since 2017.

Despite the financial setback, the Board of Directors has recommended a final dividend of ₹2 per equity share. Notably, the company's promoters have waived their entitlement to this dividend.

Adding to investor concerns, the company's statutory auditors issued a qualified audit opinion on the financial statements. This qualification arose because the auditors could not obtain sufficient evidence regarding the subsidiary investment sale, which is awaiting necessary regulatory approvals.

Auditors had previously issued a qualified opinion in February 2020 related to loans advanced to Sarla Flex Inc., concerning currency restatements and impairment testing.

In other corporate actions, the company confirmed the reappointment of Ms. Pooja Dharewa (KD Practice Consulting Private Limited) as its Internal Auditor and M/s. Kasina & Associates as Cost Auditor for the financial year 2026-27. Shareholder approval will be sought for the Cost Auditor's remuneration at the upcoming Annual General Meeting (AGM).

The Board is also scheduled to meet on May 11, 2026, to evaluate a proposal for a potential share buyback. The recommended dividend requires shareholder approval at the AGM on July 29, 2026.

Sarla Performance Fibers operates in the competitive synthetic yarn and textile sector, facing rivals such as Raymond Ltd., Vardhman Textiles Ltd., Trident Ltd., and RSWM Ltd. For context, the company reported standalone revenue of ₹383.26 crore and a profit of ₹32.91 crore in FY24. In FY25, consolidated revenue was ₹427.10 crore with a profit of ₹62.36 crore.

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