Gayatri Projects Limited Stock Analysis

Massive debt restructuring success: ₹2,388 crore exceptional gain from OTS settlement reduced total debt obligations by 76%, with entire ₹750 crore fund-based payment completed and CIRP withdrawn per NCLT order dated September 10, 2025 / Revenue acceleration: Q3 standalone revenue of ₹50,584 lakhs represents 457% growth versus Q2's ₹7,313 lakhs, with 9-month revenue at ₹65,555 lakhs (110% YoY growth from ₹31,279 lakhs), signaling strong project execution recovery / Return to profitability: Net profit of ₹2,157 crores in Q3 versus loss of ₹670 lakhs in Q2 and loss of ₹202 lakhs in Q3 FY2025; 9-month profit at ₹2,153 crores versus prior year loss of ₹3,681 lakhs / Clean balance sheet emerging: With fund-based debt fully settled and non-fund-based limits (₹1,229 crores of bank guarantees) continuing with 90-day devolvement coverage, liquidity pressure substantially reduced / GHL loan recovery progress: Associate company Gayatri Highways Limited repaid ₹2,962 lakhs of unsecured loan during the quarter, validating management's assessment that remaining ₹4,896 lakhs unsecured loan and ₹16,770 lakhs NCPS are recoverable / EPS surge to ₹115.24 for 9 months (versus loss of ₹1.97 prior year) demonstrates earnings power restoration post-restructuring

Heavy reliance on exceptional items: ₹2,388 crore gain from debt waiver is one-time; underlying operational profit before exceptional items was only ₹50 crores for 9 months, indicating core profitability remains fragile / Subordinate debt write-off of ₹13,411 lakhs due to IDTL and SMTL road projects entering liquidation/insolvency, with additional ₹4,556 lakhs subordinate debt to HKR road project fully provisioned as doubtful despite ongoing toll operations / ₹25,555 lakhs interest receivable on Inter-Corporate Loan fully written off as exceptional item after subcontractor requested waiver citing project cancellations; only ₹15,455 lakhs collateral security recognized under SARFAESI proceedings with uncertain recovery outcome / Ongoing contingent liabilities: ₹1,229 crore non-fund-based bank guarantee exposure with 90-day payment obligation if invoked, plus ₹50 crore DSRA deposit required within 12 months of NCLT approval (due by September 2026) / Receivables collection risk: ₹5,500 lakhs work advance from sub-contractor due September 2026 remains unprovisioned; another sub-contractor's delayed recoveries partially covered by historical ₹2,453 lakhs payment to lenders / Investment impairment uncertainty: ₹19,572 lakhs CCCPS investment in Gayatri Hi-tech Hotels Limited not provisioned despite conversion only in FY2028, relying on management's assessment of improved operations without independent valuation

CIRP has been formally withdrawn (NCLT approval on 10 September 2025), and the company states it has paid the entire fund-based OTS amount, materially improving near-term solvency visibility. / Core operating trend improved: consolidated profit before exceptional items was Rs 4,919.21 lakh in Q3 FY26 versus a loss of Rs 202.00 lakh in Q3 FY25; 9M pre-exceptional PBT improved to Rs 4,520.33 lakh from a loss of Rs 1,193.71 lakh. / Consolidated revenue from operations increased to Rs 50,584.47 lakh in Q3 FY26 from Rs 9,082.92 lakh in Q3 FY25, and to Rs 65,555.47 lakh in 9M FY26 from Rs 31,278.84 lakh in 9M FY25. / Finance cost declined to Rs 417.81 lakh in Q3 FY26 from Rs 513.08 lakh in Q2 FY26 and Rs 266.04 lakh in Q3 FY25, indicating some easing after debt settlement actions. / There were tangible recoveries in stressed exposures: Gayatri Highways paid Rs 2,962.17 lakh against unsecured loan dues, and subcontractor repayments of Rs 24,183.00 lakh were adjusted against ICL principal.

Reported earnings quality is weak: Q3 net profit of Rs 2,15,708.49 lakh is overwhelmingly driven by exceptional gain accounting (Rs 2,12,845.31 lakh), so recurring earnings power is not yet established. / Net worth stress remains severe with consolidated other equity at Rs -1,47,405.26 lakh, limiting financial flexibility despite OTS completion. / Large asset recoverability assumptions remain: no impairment on Rs 19,571.95 lakh CCCPS investment (Gayatri Hi-tech Hotels), despite auditor emphasis on this judgment. / Exposure to stressed associate remains high: investments/loans in GHL include NCPS Rs 16,770.03 lakh and unsecured loan Rs 4,896.21 lakh with no additional provision, while Rs 13,411.00 lakh subordinate debt was written off in the quarter. / Collection uncertainty persists in receivables/advances: Rs 15,455.00 lakh recognized as SARFAESI collateral enforcement (subject to outcome), and work advance receivable of Rs 5,499.65 lakh due by 30 September 2026 remains unprovided.