AJR INFRA AND TOLLING LIMITED Stock Analysis

Revenue from operations increased 5.74% YoY to Rs 738.39 crores in Q2 FY2026, showing some top-line resilience despite stressed operations. / The company completed the SSRPL one-time settlement and received Rs 27,500 lacs from lenders in June 2025, which helped unlock exceptional income of Rs 31,319.27 crores. / Reported EPS improved sharply to Rs 3.24 from negative Rs 0.09 in Q2 FY2025 due to the SSRPL provision reversal. / Management completed assignment of litigation claims from the Gorakhpur and Igatpuri projects for Rs 675 lacs, with Rs 210 lacs balance received in Q2, indicating some asset monetization progress. / Post-OTS, the company transferred control of Indira Container Terminal to new management while retaining a 16.29% beneficial interest, which may preserve some residual value without full operating burden.

Core profitability remains deeply weak: total revenue was Rs 738.39 crores versus total expenses of Rs 1,049.37 crores, resulting in an operating loss of Rs 863.34 crores before exceptional items. / Liquidity stress is severe, with current liabilities exceeding current assets by Rs 1,10,061.38 lacs, current ratio at just 0.13, and working capital at negative Rs 97,934.24 lacs. / Balance sheet solvency is impaired, with total equity at negative Rs 1,02,690.12 lacs and reserves/surplus at negative Rs 1,21,607.76 lacs. / Cash generation is weak, as operating cash flow was negative Rs 2,617.71 lacs and the change in cash was negative Rs 23.94 lacs despite exceptional accounting gains. / Legal and guarantee exposure remains very high, including PHPL guarantee invocation of Rs 1,19,024.39 lacs under Supreme Court appeal and RGBL invoked guarantee exposure of Rs 697.10 crores, alongside other NCLT/DRT matters. / Several SPVs remain stressed or under CIRP, while the Pravara plant is under illegal occupation and Rangit-II still requires regulatory approvals, creating execution and recoverability uncertainty.

Q2 FY2026 revenue of Rs 738.39 crores represents 5.74% YoY growth, showing the core operational business maintains modest scale despite stress / Completion of SSRPL one-time settlement with MPRDC/MORTH resulted in lender payment of Rs 27,500 crores received in June 2025, reducing one major liability overhang / Assignment of litigation claims from Gorakhpur and Igatpuri projects recovered Rs 675 crores with balance Rs 210 crores received in Q2, showing partial recovery of distressed assets / Retention of 16.29% beneficial interest in Indira Container Terminal post-transfer demonstrates some valuable asset position despite operational challenges

Material uncertainty on going concern with current liabilities exceeding current assets by Rs 1,10,061.38 crores and negative total equity of Rs 102,690.12 crores—company is technically insolvent / Critical liquidity mismatch with current ratio of 0.13 and operating cash flow of negative Rs 2,617.71 crores for H1 FY2026, indicating inability to meet short-term obligations without asset sales or debt relief / Invoked corporate guarantees totaling over Rs 1.4 lakh crores across SPVs, including Rs 1.19 lakh crores for PHPL under Supreme Court litigation with uncertain outcome and Rs 697.10 crores for RGBL with DRT proceedings pending / Multiple SPVs under CIRP proceedings, Pravara plant under illegal occupation with Rs 191.67 crores non-funded exposure, and ongoing defaults to lenders and subsidiaries creating cascading operational failures / Reported profit of Rs 30,496.12 crores is entirely non-recurring exceptional income of Rs 31,319.27 crores; underlying operating loss of Rs 863.34 crores demonstrates negative recurring earnings quality / Finance costs of Rs 332.94 crores continue despite deteriorating balance sheet, and future litigation outcomes at multiple forums (Supreme Court, NCLT, NCLAT, DRT) are uncertain with management providing no concrete resolution timelines beyond April 2026

Successfully completed one-time settlement for SSRPL project with MPRDC/MORTH, receiving Rs 27,500 lacs from lenders in June 2025 and reversing provisions worth Rs 31,319 crores as exceptional income / Revenue from operations grew 5.74% YoY to Rs 738.39 crores in Q2 FY2026, showing some top-line resilience despite operational challenges / Completed assignment of litigation claims from Gorakhpur and Igatpuri projects for Rs 675 lacs with Rs 210 lacs balance received in Q2, generating some cash inflow / EPS improved dramatically to Rs 3.24 in Q2 FY2026 from negative Rs 0.09 in Q2 FY2025, albeit entirely driven by one-time exceptional items

Auditor raised material uncertainty on going concern due to severe liquidity crisis with current liabilities exceeding assets by Rs 110,061 lacs and current ratio of just 0.13, indicating potential insolvency / Invoked corporate guarantee of Rs 119,024 lacs for PHPL under Supreme Court appeal with highly uncertain outcome, representing potential massive liability crystallization / Negative equity position of Rs 102,690 lacs with reserves and surplus at negative Rs 121,608 lacs demonstrates complete erosion of shareholder value / Operating cash flow remained deeply negative at Rs 2,618 lacs for H1 FY2026 despite Rs 738 crores quarterly revenue, reflecting inability to generate cash from core operations / Multiple SPV investments under CIRP proceedings including RGBL with invoked guarantee of Rs 697 crores and Pravara plant under illegal occupation with Rs 192 crores exposure, creating significant contingent liabilities / Underlying operating performance remains weak with operating loss of Rs 863 crores before exceptional items in Q2, indicating business model stress beyond one-time accounting gains

Revenue from operations increased 5.74% YoY to Rs 738.39 crores in Q2 FY2026, indicating some top-line resilience. / The company completed the SSRPL one-time settlement and received Rs 27,500 lacs in June 2025, improving near-term recoveries. / Exceptional income of Rs 31,319.27 crores from SSRPL provision reversal significantly improved reported earnings for the quarter. / Reported EPS improved to Rs 3.24 from Rs -0.09 in Q2 FY2025, reflecting a sharp turnaround at the reported level. / Investing cash flow was positive at Rs 2,910.07 lacs, which partly offset operating cash burn during the period.

Liquidity stress is severe: current ratio is only 0.13 and working capital is Rs -97,934.24 lacs. / Current liabilities of Rs 112,402.11 lacs exceed current assets by Rs 1,10,061.38 lacs, creating material going-concern pressure. / Net worth is deeply eroded with total equity at Rs -102,690.12 lacs and reserves/surplus at Rs -121,607.76 lacs. / Core cash generation is weak with operating cash flow at Rs -2,617.71 lacs and change in cash at Rs -23.94 lacs. / Legal and contingent liability risk is very high, including invoked corporate guarantee of Rs 1,19,024.39 lacs (PHPL), RGBL guarantee invocation of Rs 697.10 crores, and unresolved Pravara plant occupation issues.