CHL Limited Posts Loss, Auditor Flags EXIM Bank & Tax Disputes

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AuthorVihaan Mehta|Published at:
CHL Limited Posts Loss, Auditor Flags EXIM Bank & Tax Disputes
Overview

CHL Limited's board approved unaudited financial results for Q3 and 9M FY26, revealing a significant consolidated Loss Before Tax of ₹(1,340.96) lacs for the nine-month period. This comes alongside auditor concerns over ongoing EXIM Bank litigation involving a subsidiary and a substantial one-time payment of ₹1,062.16 lac for disputed property tax. Revenue figures showed standalone operations at ₹2,771.84 lacs for Q3 and ₹6,769.96 lacs for 9M, while consolidated revenue reached ₹4,091.90 lacs for Q3 and ₹10,401.00 lacs for 9M.

📉 The Financial Deep Dive

CHL Limited has disclosed its unaudited financial results for the third quarter and nine months ended December 31, 2025, with the board approving the figures on February 9, 2026. The standalone revenue from operations stood at ₹2,771.84 lacs for Q3 FY26 and ₹6,769.96 lacs for the nine months. Consolidated revenue presented a different picture, reaching ₹4,091.90 lacs for Q3 FY26, but the nine-month period concluded with a substantial consolidated Loss Before Tax of ₹(1,340.96) lacs, a critical point for investors. The standalone Profit Before Tax was ₹1,142.11 lacs for Q3 FY26 and ₹1,240.81 lacs for the nine months.

🚩 The Grill & Red Flags

The accompanying Independent Auditor's Limited Review Report from D G A & Co. flags two significant matters that warrant investor attention. Firstly, ongoing litigation concerning a loan taken by subsidiary CHL International from EXIM Bank, where CHL Limited is a guarantor. Despite a One Time Settlement (OTS) for USD 34 million being implemented, multiple legal cases persist in the Supreme Court and Debt Recovery Tribunals. Secondly, the company made a non-recurring payment of ₹1,062.16 lac towards disputed property tax, pursuant to a Delhi High Court order. This expense has been charged to the current period's Profit and Loss statement, impacting current profitability and representing an item not recognized in prior years.

🎯 Risks & Outlook

The primary risks for CHL Limited stem from the unresolved EXIM Bank litigation, which carries significant contingent liabilities. The substantial, one-time property tax payment also distorts the current period's profitability. The absence of any forward-looking guidance or management outlook in this filing leaves the Street with limited visibility on future performance. Investors will need to closely monitor the progress of the EXIM Bank OTS implementation and any further developments in the pending legal cases. The consolidated loss for the nine-month period is a major concern that requires deeper investigation into operational efficiencies and subsidiary performance.

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