💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations declined by 81.89% YoY in Q2 FY26, falling to INR 220.65 Lakhs from INR 1,218.26 Lakhs. For the half-year ended September 30, 2025, revenue dropped 82.12% to INR 399.70 Lakhs from INR 2,235.53 Lakhs due to the cessation of key refurbishment activities and workforce reductions.

Profitability Margins

Net Profit Ratio worsened by 42.92% in FY25, moving from -0.93 to -1.33. The company reported a net loss of INR 2,375.10 Lakhs for H1 FY26, compared to a loss of INR 3,124.86 Lakhs in H1 FY25, reflecting persistent operational inefficiencies and high fixed costs relative to shrinking revenue.

EBITDA Margin

EBIDTA was reported at INR 9.60 Cr for FY24 on a total operating income of INR 51.98 Cr, representing an 18.47% margin. However, subsequent periods show significant operating losses and a disclaimer of audit opinion, suggesting core profitability has collapsed.

Capital Expenditure

Capital advances of INR 20.29 Cr are outstanding for more than one year (INR 10.81 Cr current and INR 9.49 Cr non-current), but auditors noted a lack of confirmation and no provision for bad portions, indicating stalled or risky capital deployment.

Credit Rating & Borrowing

The company faces challenges in servicing current liabilities, including borrowings of INR 40.19 Cr as of March 31, 2025. Interest expenditure for H1 FY26 was INR 350.91 Lakhs, down 44.14% from INR 628.19 Lakhs in the previous year, likely due to reduced credit access or restructuring.

⚙️ Operational Drivers

Raw Materials

E-waste inventory, computer peripherals, and components represent the primary raw materials, with cost of materials consumed totaling INR 193.67 Lakhs in H1 FY26, which is 48.45% of total revenue.

Capacity Expansion

The company has ceased certain key operations, including refurbishment activities, and substantially reduced its workforce, indicating a contraction rather than expansion of capacity.

Raw Material Costs

Cost of material consumed dropped 90.33% YoY in H1 FY26 to INR 193.67 Lakhs from INR 2,003.48 Lakhs, directly correlating with the massive reduction in manufacturing and refurbishment operations.

Manufacturing Efficiency

Trade Payables Turnover Ratio decreased by 62.90% in FY25 (from 1.36 to 0.84) due to a sharp reduction in purchases, indicating severely diminished manufacturing activity and efficiency.

📈 Strategic Growth

Expected Growth Rate

0%

Growth Strategy

The company is currently in a survival phase rather than a growth phase. Strategy involves attempting to restructure operations, settle income tax dues of INR 35.67 Cr, and raise long-term funds to address a disclaimer of opinion regarding its going concern status.

Products & Services

E-waste recycling, refining, refurbishment services, electronic manufacturing services (EMS), and IT infrastructure management.

Brand Portfolio

Cerebra

🌍 External Factors

Industry Trends

While the e-waste recycling industry is generally growing due to environmental regulations, Cerebra is losing market position due to internal financial distress, workforce reductions, and a lack of audit-verifiable financial records.

Competitive Landscape

The company is losing ground to competitors as it fails to service its debt and maintain its workforce, leading to a 33.57% decline in its trade receivables turnover ratio.

Competitive Moat

The company's moat in e-waste recycling is currently non-existent due to the cessation of key refurbishment activities and a disclaimer of opinion from auditors regarding internal financial controls.

Macro Economic Sensitivity

Highly sensitive to the regulatory environment for e-waste and the availability of long-term financing, as the company is currently unable to meet its current liabilities of INR 93.52 Cr.

⚖️ Regulatory & Governance

Industry Regulations

The company is failing to comply with Ind AS 2 (Inventories), Ind AS 21 (Foreign Exchange), and Section 133 of the Companies Act, according to the auditor's disclaimer of opinion.

Environmental Compliance

As an e-waste recycler, the company is subject to strict environmental norms, but auditors were unable to confirm regulatory compliance regarding the recoverability of dues and inventory valuation.

Taxation Policy Impact

The company has significant unpaid income tax dues, with current tax liabilities (net) standing at INR 35.67 Cr as of September 30, 2025.

Legal Contingencies

The company faces material uncertainties regarding pending litigations and their impact on financial position, which auditors were unable to quantify. Current tax liabilities of INR 35.67 Cr represent a major immediate legal/financial obligation.

⚠️ Risk Analysis

Key Uncertainties

There is a material uncertainty (100% impact risk) regarding the company's ability to continue as a going concern due to significant operating losses, workforce reduction, and inability to service liabilities.

Third Party Dependencies

High dependency on the ability of management to secure third-party long-term funding to restructure operations.

Technology Obsolescence Risk

High risk of technology obsolescence in the e-waste and refurbishment segment, evidenced by the ad-hoc devaluation of INR 19.95 Cr of stock in FY25.

Credit & Counterparty Risk

Extreme credit risk; 99.06% of trade receivables (INR 142.23 Cr) are older than one year, with inadequate provisioning (only INR 84.57 Cr provided against potential bad debts).