Mangalam Drugs Faces Prolonged ₹15.57 Crore Default

Mangalam Drugs and Organics Limited continues to grapple with severe liquidity constraints, reporting ongoing defaults on its revolving working capital facilities totaling ₹15.57 crore as of mid-July 2026. Key Highlights: Default Details: The overdue amount includes ₹9.51 crore to Bank of Maharashtra and ₹6.06 crore to Bank of Baroda. The default has persisted for nearly 11 months (since October 2025), with balances continuously exceeding sanctioned drawing power. Q1 FY27 Financials: The company showed marginal operational improvement, narrowing its standalone net loss by ~45% YoY to ₹7.55 crore (from ₹13.73 crore). However, operating revenue remained stagnant at ₹57.12 crore. Strategic Risks & Market Implications: Credit & NPA Threat: The prolonged duration of the default places the company’s credit rating under severe pressure and significantly increases the risk of lenders classifying the accounts as Non-Performing Assets (NPAs) or initiating recovery actions. Operational Bottleneck: This persistent working capital gap restricts access to fresh credit, which could eventually disrupt raw material procurement and hamper production volumes at the company’s critical Vapi API manufacturing facility. Outlook: While management has made progress in cost control and inventory management to narrow losses, the systemic liquidity crisis remains unresolved. An urgent debt restructuring package or fresh equity infusion is critical to restore banking relationships, normalize working capital cycles, and safeguard ongoing manufacturing operations.