The Lakshmi Mills Company Ltd, one of the oldest yarn and fabric manufacturing companies reported a net loss of Rs 15.55 crore (US $1.64 million) in FY26, widening significantly from a loss of Rs 4.68 crore (US $0.49 million) in FY25, despite the company turning profitable at the pre-tax level.
The textile company reported a profit before tax and exceptional items of Rs 7.54 crore (US $0.79 million) in FY26, compared with a loss of Rs 7.40 crore (US $0.78 million) in the previous year. However, the improvement was offset by a sharp increase in tax expenses, which rose to Rs 22.85 crore (US $2.41 million) from a tax credit of Rs 2.51 crore (US $0.26 million) in FY25.
Revenue from operations declined 8.1% year-on-year to Rs 241.83 crore (US $25.50 million) from Rs 263.16 crore (US $27.75 million), mainly due to weaker performance in the textile business.
Revenue from the company’s textile business fell to Rs 209.06 crore (US $22.04 million) in FY26 from Rs 231.81 crore (US $24.44 million) a year earlier. Export revenue declined nearly 19% to Rs 27.38 crore (US $2.89 million).
The rental services segment, however, provided some support, with revenue increasing to Rs 24.80 crore (US $2.62 million) from Rs 21.77 crore (US $2.30 million), aided by new tenants and event-based revenue sharing.
The sharp increase in tax expense was primarily linked to the company’s transition to the concessional tax regime under Section 115BAA. As part of the transition, Lakshmi Mills wrote off MAT credit entitlement of Rs 9.18 crore (US $0.97 million).
Together with deferred tax adjustments, the tax impact resulted in a total tax expense of Rs 22.85 crore (US $2.41 million), more than three times the company’s pre-tax profit. As a result, the reported net loss was significantly higher despite the improvement in underlying pre-tax performance.
Lakshmi Mills also reduced its total borrowings to Rs 81.29 crore (US $8.57 million) in FY26 from Rs133.51 crore (US $14.08 million) in FY25. The reduction in debt improved its debt-to-equity ratio to 0.11 from 0.15.
Despite reporting a net loss, the Board recommended a Rs 10 per share dividend, representing a 10% payout, subject to shareholder approval at the company’s Annual General Meeting scheduled for September 25.
