Capacite Infraprojects reported a 10.12% YoY revenue jump to ₹5,548 crore for Q3 FY26 on a standalone basis, with PAT up 22.31%. However, 9M FY26 standalone revenue dropped 25.26%. Crucially, auditors flagged inability to verify recoverability of ₹1,156 crore in trade receivables and noted ₹5,493 crore in long-outstanding dues, casting a shadow over the performance.
The Quality: While Q3 standalone revenue grew by over 10% and PAT by over 22%, the nine-month performance shows a significant contraction. Standalone revenue fell by 25.26% YoY, and consolidated revenue declined by 33.40% YoY. Consolidated PAT also dipped by 2.91% in Q3 and 1.41% in 9M, indicating margin pressures or increased costs that offset revenue gains. The quality of earnings is heavily scrutinized due to substantial receivables issues.
The Grill: The most critical aspect is the statutory auditor's limited review report. M S K A & Associates LLP stated they were unable to comment on the recoverability and required loss allowance for ₹1,155.93 lakhs in trade receivables, which management recorded based on future projections after a previous write-off. The predecessor auditor had also flagged this. Additionally, ₹5,492.76 lakhs in long-outstanding trade receivables and contract assets remain subject to legal recovery processes with uncertain outcomes. The company also incurred an additional expense of ₹38.13 lakhs in Q3 FY26 due to new Labour Codes. Crucially, no forward-looking guidance was provided by the management, leaving investors without clarity on future prospects.
🚩 Risks & Outlook
Specific Risks: The primary risk revolves around the substantial trade receivables that are either subject to auditor's doubt regarding recoverability or are long-outstanding and under legal action. Failure to recover these amounts could lead to significant write-offs, impacting profitability and net worth. The sharp decline in nine-month revenues also presents a significant headwind. The absence of management guidance exacerbates uncertainty.
The Forward View: Investors should closely monitor the company's ability to recover the disputed and long-outstanding receivables. Any updates on legal outcomes or further provisions will be critical. The company's ability to reverse the trend of declining 9M revenues and demonstrate consistent profitability will be key watchpoints in the upcoming quarters.
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