Nava Limited shares were trading above ₹700 for most of May 15, holding within a ₹694–724 range throughout the morning and afternoon session, when results were released at approximately 2:00 PM. Within minutes, the stock collapsed vertically to ₹643.75 — a fall of ₹59.85 or 8.51% from its previous close of ₹703.60 — touching an intraday low of ₹642.50. The price action on the chart tells the story with unusual clarity: this was not a gradual selloff but an instantaneous market verdict on the numbers.
The verdict is explained entirely by a single line in the P&L. Deferred tax expense for Q4FY26 came in at ₹163.26 crore against just ₹14.74 crore in Q4FY25 — a spike of over ₹148 crore that hit the bottom line directly. Combined with current tax of ₹25.54 crore, total tax expense for the quarter stood at ₹188.80 crore against ₹21.13 crore a year ago — a near ninefold increase on the tax line alone. Profit before tax from continuing operations was actually broadly stable year on year at ₹325.33 crore versus ₹324.30 crore, meaning the underlying business performed comparably to Q4FY25. But the tax charge compressed reported profit from continuing operations to ₹136.53 crore from ₹303.17 crore — a 55% fall — and PAT attributable to shareholders of the holding company to ₹127.13 crore from ₹234.41 crore.
Revenue from operations grew 12.24% year on year to ₹1,142.85 crore, and on a full-year basis FY26 revenue rose 7.72% to ₹4,290.92 crore — both solid numbers that the market would ordinarily have welcomed. The pre-tax operating performance held up. But in a quarter where the deferred tax line moves by ₹148 crore, none of that matters to the immediate price reaction.
The full-year picture compounds the concern. For FY26, deferred tax expense was ₹261.79 crore against a deferred tax credit of ₹10.47 crore in FY25 — a swing of over ₹272 crore in the tax line across the year. Full-year PAT attributable to shareholders fell 27.94% to ₹786.67 crore from ₹1,091.48 crore. Whether the deferred tax charge reflects a one-time reassessment, timing differences from the Zambia power business, or a structural shift in the tax position of the group is the key question analysts will seek to address at the post-results call. Until that clarity arrives, the market has taken the safer position.
At ₹643.75 and a P/E of 20.50x post-selloff, Nava is now trading near the lower end of its recent valuation range. The 52-week range spans ₹449.50 to ₹739.40, placing today’s close approximately 43% above the 52-week low. Average daily volume of 1.41 million shares suggests today’s post-results volume is likely to be multiples of that as institutional and retail investors reassess the deferred tax situation.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.