💰 Financial Performance

Revenue Growth by Segment

Revenue from operations declined 54.24% YoY to INR 1,376.23 Lakhs in Q2 FY26 from INR 3,007.35 Lakhs in Q2 FY25. For H1 FY26, revenue fell 44.21% YoY to INR 3,268.10 Lakhs. Segment-wise breakdown is not disclosed.

Geographic Revenue Split

Approximately 98% of revenue is generated in India, with international subsidiaries (Zenith USA and Zenith Middle East) contributing INR 27.87 Lakhs (2%) in Q2 FY26.

Profitability Margins

Net Profit Margin improved to 5.2% in Q2 FY26 (INR 71.62 Lakhs) from a negative margin of -1.45% (INR 43.80 Lakhs loss) in Q2 FY25, primarily driven by a 476% increase in Other Income to INR 726.87 Lakhs.

EBITDA Margin

EBITDA Margin stood at 13.27% in Q2 FY26 compared to 2.28% in Q2 FY25. However, core operating EBITDA (excluding other income) remains negative, indicating that profitability is reliant on non-operating items.

Credit Rating & Borrowing

Credit rating is not disclosed. Finance costs were INR 124.16 Lakhs for H1 FY26 on total current liabilities of INR 36,663.60 Lakhs.

⚙️ Operational Drivers

Raw Materials

Raw materials and components represent 54.4% of total revenue from operations in Q2 FY26, amounting to INR 749.04 Lakhs.

Key Suppliers

Not disclosed in available documents; management is engaging with 'key suppliers' to improve operational efficiency.

Raw Material Costs

Raw material costs were INR 1,908.83 Lakhs for H1 FY26, representing 58.4% of revenue. Costs increased 46.9% YoY in H1 despite a 44.2% drop in revenue, indicating significant input cost pressure.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The Group is implementing a revival plan focused on improving operational efficiency, evaluating new business options to augment income, and ensuring long-term financial sustainability through projected future cash flows.

Products & Services

Steel pipes and related industrial products.

Brand Portfolio

Zenith Steel Pipes, The Yash Birla Group.

Strategic Alliances

Part of The Yash Birla Group; subsidiaries include Zenith USA INC and Zenith Middle East - FZ-LLP.

🌍 External Factors

Industry Trends

The steel pipe industry is undergoing a period of consolidation and revival; Zenith is positioning itself through strategic engagement with suppliers to stabilize operations.

Competitive Moat

The company relies on the established brand heritage of Zenith Steel Pipes and its association with the Yash Birla Group, though sustainability is currently challenged by negative net worth.

Geopolitical Risks

Zenith USA INC recorded no transactions in Q2 FY26 due to non-availability of bank statements, indicating operational risks in foreign jurisdictions.

⚖️ Regulatory & Governance

Industry Regulations

Non-compliance with the MSMED Act 2006 regarding vendor classification and interest provision is a noted regulatory gap.

Taxation Policy Impact

Current tax liabilities (Net) stand at INR 908.47 Lakhs as of Sept 30, 2025.

Legal Contingencies

The company received a GST demand notice of INR 28.76 Lakhs in the previous quarter. There is also a provision of INR 43.59 Lakhs for frozen/non-operating bank accounts.

⚠️ Risk Analysis

Key Uncertainties

Auditor qualifications regarding inventory valuation (INR 779.36 Lakhs) and the lack of updated financial information for the US subsidiary present significant reporting uncertainties.

Geographic Concentration Risk

High concentration in India, with 98% of revenue and the majority of assets located domestically.

Third Party Dependencies

High dependency on key suppliers for the successful implementation of the operational revival plan.

Credit & Counterparty Risk

Trade receivables of INR 5,656.46 Lakhs represent over 400% of quarterly revenue, indicating significant credit risk and potential collection delays.