Nelco Limited Announces Q1 FY26 Financial Results, Showing Mixed Performance
Published: Jul 25, 2025 00:10
Nelco Limited has announced its unaudited financial results for the quarter ended June 30, 2025 (Q1 FY26), alongside the limited review reports. The results, both consolidated and standalone, were approved by the Board of Directors on July 14, 2025. The company noted that there were some technical issues while attempting to upload the results to the NSE portal on July 14, 2025, which led to this submission.
Company Announcement Summary
The company’s Board Meeting, held on July 14, 2025, concluded with the approval of the Unaudited Financial Results for the quarter ended June 30, 2025. Additionally, the Board approved the re-appointment of P.D. Dani & Associates as Cost Auditors for the Financial Year 2025-26.
Auditor’s Report Highlights
The Independent Auditor’s Review Reports for both Consolidated and Standalone Financial Results, conducted by S.R. Batliboi & Associates LLP, did not identify any material misstatements or qualifications. The auditors stated that “nothing has come to our attention that causes us to believe that the accompanying Statement… has not disclosed the information required… or that it contains any material misstatement.”
Consolidated Financial Performance (Q1 FY26)
The table below presents the unaudited consolidated financial results for Nelco Limited for the quarter ended June 30, 2025, compared to previous periods.
Nelco Limited - Unaudited Consolidated Financial Results (Rs in Lakhs, except per share data)
| Sr.No. | Particulars | 3 Months ended Jun 30, 2025 (Unaudited) | Preceding 3 Months ended Mar 31, 2025 (Audited) | Corresponding 3 Months ended Jun 30, 2024 (Unaudited) | Previous Year ended Mar 31, 2025 (Audited) |
|---|---|---|---|---|---|
| 1 | Income | ||||
| a) Income from operations | 7,479 | 6,752 | 7,408 | 30,487 | |
| b) Other income (refer note 3) | 57 | 264 | 11 | 518 | |
| Total income | 7,536 | 7,016 | 7,419 | 31,005 | |
| 2 | Expenses | ||||
| a) Purchase of stock- in-trade | 642 | 1,111 | 555 | 3,184 | |
| b) Changes in Inventories of stock-in-trade | 368 | (857) | (36) | (482) | |
| c) Operating expenses (refer note 4) | 3,384 | 3,461 | 3,542 | 14,747 | |
| d) Employee benefits expenses | 1,192 | 1,103 | 1,205 | 4,573 | |
| e) Other expenses | 1,119 | 1,271 | 910 | 4,268 | |
| Total expenses | 6,705 | 6,089 | 6,176 | 26,290 | |
| 3 | Profit before finance cost, depreciation, amortisation, share of profit from associate and tax (1-2) | 831 | 927 | 1,243 | 4,715 |
| 4 | Finance cost, depreciation and amortisation | ||||
| a) Finance cost (refer note 2(a)) | 118 | 152 | 108 | 552 | |
| b) Depreciation and amortisation expense | 492 | 643 | 529 | 2,216 | |
| Total finance cost, depreciation and amortisation | 610 | 795 | 637 | 2,768 | |
| 5 | Profit before share of profit from associate and tax (3-4) | 221 | 132 | 606 | 1,947 |
| 6 | Add: Share of profit from associate | 19 | (19) | 5 | 19 |
| 7 | Profit before tax (5+6) | 240 | 113 | 611 | 1,966 |
| 8 | Tax expense | ||||
| a) Current tax | 111 | 175 | 252 | 1,054 | |
| b) Deferred tax (net) | (51) | (147) | (97) | (555) | |
| c) Tax adjustment for earlier years (including deferred tax) [refer note 2(b)] | - | 493 | - | 514 | |
| Total tax expenses | 60 | 521 | 155 | 1,013 | |
| 9 | Net profit/(loss) for the period/year (7-8) | 180 | (408) | 456 | 953 |
| 10 | Other comprehensive income/(expenses) | ||||
| - Remeasurement of post employment benefit obligations (net of tax) | (42) | 6 | (30) | (19) | |
| Other comprehensive income/(expenses) | (42) | 6 | (30) | (19) | |
| 11 | Total comprehensive income/(expenses) for the period/year (9+10) | 138 | (402) | 426 | 934 |
| 12 | Paid up equity share capital (face value Rs.10/- each) | 2,282 | 2,282 | 2,282 | 2,282 |
| 13 | Other equity | - | - | - | 10,508 |
| 14 | Earnings per share (Basic and diluted) (Face value Rs. 10/-each) (not annualised) | 0.79 | (1.79) | 2.00 | 4.18 |
| 15 | Dividend per share (Par Value Rs. 10/- each) (refer note 5) | ||||
| Final dividend on equity shares (in Rs.) | 1.00 | - | 2.20 | 2.20 | |
| Total equity dividend percentage (%) | 10 | - | 22 | 22 |
Notes to Consolidated Financial Results
- Preparation Basis: The consolidated financial results are prepared in accordance with Indian Accounting Standards (‘IND AS’) and approved by the Board of Directors on July 14, 2025.
- Variable License Fee & Income Tax Matters:
- Supreme Court Judgment on Variable License Fee (Note 2(a)): Following a Supreme Court judgment on October 16, 2023, concerning the treatment of Variable License Fee, Nelco had prudently provisioned Rs. 102 lakhs for tax and Rs. 46 lakhs for interest for FY24. However, a subsequent Supreme Court order on May 17, 2024, waived the interest liability. Consequently, during the quarter ended June 30, 2024 (Q1 FY25), management reversed a liability of Rs. 22 Lakhs related to interest from the period before October 16, 2023. (Note: The document states “quarter ended June 30, 2024” but based on the context of the letter, it seems to refer to Q1 FY25 for the reversal, not Q1 FY24. This is a minor historical adjustment.)
- “Vivad se Vishwas Scheme, 2024” (Note 2(b)): In Q4 FY25, the company settled a pending income tax matter for Assessment Year 2011-12 under this scheme. This resulted in recognizing Rs. 488 Lakhs as “Tax Adjustments for earlier years” and Rs. 21 Lakhs as “Finance Cost” in Q4 FY25. These are prior-period adjustments.
- Other Income (Note 3): Other income for the quarter includes Rs. 22 lakhs from interest received on income tax refunds.
- Satellite Outage (Note 4): An event in FY25 (October 19, 2024) where Intelsat’s IS-33E satellite experienced a power outage, leading to its non-recovery, had minimal impact on Nelco’s revenue for FY25 as customers were successfully migrated to alternative satellite capacity. This information was already intimated to Stock Exchanges.
- Dividend (Note 5): A final dividend of Rs. 1.00 (10%) per equity share for FY25 was recommended by the Board and approved by shareholders on June 24, 2025.
- Q4 FY25 Figures (Note 6): Figures for the quarter ended March 31, 2025, represent the difference between the full financial year audited figures and the nine-month unaudited figures.
- Segment Reporting (Note 7): Nelco operates in a single reportable segment, “Network Systems.”
Standalone Financial Performance (Q1 FY26)
The table below presents the unaudited standalone financial results for Nelco Limited for the quarter ended June 30, 2025, compared to previous periods.
Nelco Limited - Unaudited Standalone Financial Results (Rs in Lakhs, except per share data)
| Sr.No. | Particulars | 3 Months ended Jun 30, 2025 (Unaudited) | Preceding 3 Months ended Mar 31, 2025 (Audited) | Corresponding 3 Months ended Jun 30, 2024 (Unaudited) | Previous Year ended Mar 31, 2025 (Audited) |
|---|---|---|---|---|---|
| 1 | Income | ||||
| a) Income from operations | 4,687 | 5,077 | 5,328 | 20,563 | |
| b) Other income (refer note 3) | 68 | 146 | 11 | 395 | |
| Total income | 4,755 | 5,223 | 5,339 | 20,958 | |
| 2 | Expenses | ||||
| a) Cost of materials consumed | - | 1 | - | 2 | |
| b) Operating expenses (refer note 4) | 2,686 | 2,605 | 3,065 | 11,638 | |
| c) Employee benefits expenses | 753 | 694 | 763 | 2,934 | |
| d) Other expenses | 825 | 963 | 599 | 2,975 | |
| Total expenses | 4,264 | 4,263 | 4,427 | 17,549 | |
| 3 | Profit before finance cost, depreciation, amortisation and tax (1-2) | 491 | 960 | 912 | 3,409 |
| 4 | Finance cost, depreciation and amortisation | ||||
| a) Finance cost (refer note 2(a)) | 21 | 50 | 9 | 154 | |
| b) Depreciation and amortisation expense | 313 | 271 | 350 | 1,263 | |
| Total finance cost, depreciation and amortisation | 334 | 321 | 359 | 1,417 | |
| 5 | Profit before tax (3-4) | 157 | 639 | 553 | 1,992 |
| 6 | Tax expense | ||||
| a) Current tax | 116 | 271 | 247 | 1,058 | |
| b) Deferred tax (net) | (75) | (117) | (107) | (551) | |
| c) Tax adjustment for earlier years (including deferred tax) [refer note 2(b)] | - | 488 | - | 504 | |
| Total tax expense | 41 | 642 | 140 | 1,011 | |
| 7 | Net profit/(loss) for the period/year (5-6) | 116 | (3) | 413 | 981 |
| 8 | Other comprehensive income/(expenses) | ||||
| - Remeasurement of post employment benefit obligations (net of tax) | (25) | 7 | (22) | (14) | |
| Other comprehensive income/(expenses) | (25) | 7 | (22) | (14) | |
| 9 | Total comprehensive income for the period/ year (7+8) | 91 | 4 | 391 | 967 |
| 10 | Paid up equity share capital (face value Rs.10/- each) | 2,282 | 2,282 | 2,282 | 2,282 |
| 11 | Other equity | - | - | - | 9,958 |
| 12 | Earnings per share (Basic and diluted) (Face value Rs. 10/-each) (not annualised) | 0.51 | (0.01) | 1.81 | 4.30 |
| 13 | Dividend per share (Par value Rs. 10/- each) (refer note 5) | ||||
| Final dividend on equity shares (in Rs.) | 1.00 | - | 2.20 | 2.20 | |
| Total equity dividend percentage (%) | 10 | - | 22 | 22 |
Notes to Standalone Financial Results
The notes for the standalone financial results largely mirror those for the consolidated results, with specific figures pertaining to Nelco Limited as a standalone entity:
- Preparation Basis: Prepared in accordance with IND AS and approved by the Board on July 14, 2025.
- Variable License Fee & Income Tax Matters:
- Supreme Court Judgment on Variable License Fee (Note 2(a)): Refers to the Rs. 22 Lakhs interest liability reversal in Q1 FY25 (period before October 16, 2023) due to a Supreme Court order.
- “Vivad se Vishwas Scheme, 2024” (Note 2(b)): Mentions the Rs. 488 Lakhs tax and Rs. 21 Lakhs interest recognized in Q4 FY25 for a prior-period tax matter.
- Other Income (Note 3): Other income includes Rs. 17 lakhs from interest received on income tax refunds for Q1 FY26.
- Satellite Outage (Note 4): Refers to the Intelsat’s IS-33E satellite power outage in FY25 and its minimal impact on the company.
- Dividend (Note 5): Reconfirms the final dividend of Rs. 1.00 (10%) per equity share for FY25, approved on June 24, 2025.
- Q4 FY25 Figures (Note 6): Figures for the quarter ended March 31, 2025, are balancing figures derived from the audited full year and unaudited nine-month figures.
- Segment Reporting (Note 7): Nelco operates in a single reportable segment, “Network Systems.”
Other Important Information
- Cost Auditors Re-appointment: P.D. Dani & Associates have been re-appointed as Cost Auditors for FY 2025-26. The firm, led by Mr. Praful D. Dani and Mr. Sandeep Poddar, specializes in Cost and Management Accounting and offers various services including Statutory Cost Audits and setting up costing systems.
Overall Summary and Key Takeaways
Nelco Limited has reported its Q1 FY26 financial performance, showing a mixed trend.
Consolidated Performance (Q1 FY26 vs. Q4 FY25 vs. Q1 FY25):
- Revenue: Income from operations increased marginally by 1.09% Year-on-Year (YoY) to Rs. 7,479 lakhs from Rs. 7,408 lakhs in Q1 FY25. However, it saw an increase of 10.77% Quarter-on-Quarter (QoQ) from Rs. 6,752 lakhs in Q4 FY25.
- Total Income: Increased YoY by 1.58% to Rs. 7,536 lakhs (Q1 FY26) from Rs. 7,419 lakhs (Q1 FY25) and QoQ by 7.41% from Rs. 7,016 lakhs (Q4 FY25).
- Profit Before Tax (PBT): PBT significantly decreased by 60.72% YoY to Rs. 240 lakhs (Q1 FY26) from Rs. 611 lakhs (Q1 FY25). However, it showed a substantial improvement QoQ, rising from Rs. 113 lakhs (Q4 FY25), which was a period impacted by tax adjustments.
- Net Profit: Net Profit also saw a sharp decline of 60.53% YoY to Rs. 180 lakhs (Q1 FY26) from Rs. 456 lakhs (Q1 FY25). QoQ, it turned positive from a loss of Rs. (408) lakhs in Q4 FY25, largely due to the absence of the significant prior-year tax adjustment from the “Vivad se Vishwas Scheme” that impacted Q4 FY25.
- Earnings Per Share (EPS): Basic and Diluted EPS decreased to Rs. 0.79 in Q1 FY26 from Rs. 2.00 in Q1 FY25, but improved from Rs. (1.79) in Q4 FY25.
Standalone Performance (Q1 FY26 vs. Q4 FY25 vs. Q1 FY25):
- Revenue: Income from operations decreased by 12.18% YoY to Rs. 4,687 lakhs (Q1 FY26) from Rs. 5,328 lakhs (Q1 FY25). It also declined by 7.68% QoQ from Rs. 5,077 lakhs (Q4 FY25).
- Total Income: Decreased YoY by 10.93% to Rs. 4,755 lakhs (Q1 FY26) from Rs. 5,339 lakhs (Q1 FY25) and QoQ by 8.96% from Rs. 5,223 lakhs (Q4 FY25).
- Profit Before Tax (PBT): PBT significantly decreased by 71.61% YoY to Rs. 157 lakhs (Q1 FY26) from Rs. 553 lakhs (Q1 FY25). It also saw a sharp decline QoQ from Rs. 639 lakhs (Q4 FY25).
- Net Profit: Net Profit decreased by 71.82% YoY to Rs. 116 lakhs (Q1 FY26) from Rs. 413 lakhs (Q1 FY25). QoQ, it turned positive from a loss of Rs. (3) lakhs in Q4 FY25.
- Earnings Per Share (EPS): Basic and Diluted EPS decreased to Rs. 0.51 in Q1 FY26 from Rs. 1.81 in Q1 FY25, improving from Rs. (0.01) in Q4 FY25.
Key Takeaways:
- Profitability Decline (YoY): Both consolidated and standalone net profits have seen a significant year-on-year decrease in Q1 FY26, despite a slight increase in consolidated revenue. This indicates pressure on margins or higher expenses relative to last year.
- QoQ Recovery from Losses: The company’s net profit turned positive QoQ, recovering from losses in Q4 FY25, which were primarily driven by a substantial prior-period tax adjustment under the “Vivad se Vishwas Scheme.” This suggests a more normalized performance in the current quarter.
- Standalone Underperformance: The standalone segment (which is the core Network Systems segment) shows a decline in both revenue and profitability YoY and QoQ, indicating potential challenges within the primary operations. The consolidated results are somewhat buoyed by subsidiary and associate contributions, although not enough to offset the overall YoY decline in profit.
- Dividend: The company has already paid a final dividend of Rs. 1.00 per share for FY25.
- Historical Adjustments: Several notes pertain to prior-period adjustments (e.g., Variable License Fee interest reversal, Vivad se Vishwas Scheme tax payment), which impacted previous quarters but are not indicative of current operational performance challenges.
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