Afcom Holdings' first year under Ind AS is the story: the transition restated prior-year profit and equity down, and it brought onto the balance sheet ₹338 crore of aircraft lease liabilities that the company's reported borrowings never showed. The operating-cash-flow record is thin against profit, expansion has been funded by equity raises, and promoter shareholding fell sharply in the same year the board sought to raise director pay.
Key findings
- Reported borrowings understate debt by roughly ₹338 crore of aircraft leases
Major- Afcom recognised lease liabilities of approximately ₹338 crore under Ind AS 116 as of FY2025-26, against leased assets (three aircraft) valued at ₹306 crore. Reported borrowings were ₹49.37 crore, giving a debt-equity ratio of 0.14 times that rises to approximately 0.88 times when lease liabilities are included. All book debts of 135.76 crore as at March 31, 2026 are hypothecated to secure short-term borrowings repayable on demand. - Operating cash flow has lagged profit, with expansion funded by equity raises
Major- Cumulative CFO of ₹45 crore over six years equals only 0.22x cumulative PAT less other income of ₹205 crore and 0.12x cumulative EBITDA of ₹360 crore. FY2025-26 operating cash conversion was approximately 15%, with the gap attributed to working capital absorbed by 144% revenue growth. The company raised ₹129.62 crore via preferential allotment during FY2025-26, while no dividend was declared for FY2023-24, FY2024-25, or FY2025-26. - First Ind AS transition restated FY2024-25 profit down ₹13.67 crore and equity down ₹15.51 crore
Major- The transition from previous GAAP restated FY2024-25 profit before tax from 65.21 crore to 51.54 crore, and equity from 195.51 crore to 180 crore as at March 31, 2025. FY2025-26 profit absorbed ₹28.07 crore of forex losses under Ind AS 21, up from ₹6.52 crore. Management states maintenance reserve is now charged to P&L under Ind AS, constituting 38% of fixed costs in FY26. - Revenue quality rests on a concentrated customer base and receivables growing faster than revenue
Major- Trade receivables reached 135.76 crore as at March 31, 2026, up from 59.03 crore a year earlier. Receivable days were 95.48 in FY25 versus 55.98 in FY24. Management states receivables stand at around 60 days based on recent billings and that none are outstanding more than 6 months, while Acuite notes receivables days were \~95 days in FY2025. - Promoter holding fell 6.89pp to 35.84% while the board sought to raise director pay
Major- Promoter shareholding declined to 35.84% over one year, with insider disposals totalling ₹38.01 crore across two events. The board approved on 28 May 2026 raising the Managing Director's pay from ₹5,00,000 to up to ₹10,00,000 per month and the Whole-Time Director's pay from ₹2,50,000 to up to ₹6,00,000 per month, subject to shareholder approval. In the 11 May 2026 postal ballot, promoter votes were cast 100% in favour. - A ₹6.59 crore disputed income-tax demand is pending before CIT(A)
Minor- The Income Tax Department raised a demand of ₹6.59 crore for AY 2022-23, against which an appeal before CIT(A) is pending with ₹23.74 lakh paid as deposit. No provision has been recognised for the balance based on management's view of reasonable grounds. The disputed demand of 6.59 crore was unchanged from March 31, 2025. - Related-party dealings are small, disclosed, and fully repaid within the year
Minor- An advance of ₹2.89 crore to M/s Flyaeon Aviation Private Limited during FY2025-26 was fully repaid within the year. Unsecured loans from related parties as of March 31, 2025 were ₹44.44 lakh, and were nil as of March 31, 2026. CARO confirmed all related party transactions complied with Sections 177 and 188 of the Companies Act. - Two subsidiaries were added immediately after year-end
Minor- Afcom had no subsidiary, joint venture, or associate during FY2025-26. Subsequent to year-end, Dubai subsidiary Afcom Cargo FZCO was incorporated and Indian subsidiary Global Indavi Private Limited was acquired in May 2026. On August 14, 2026, the company announced the incorporation of Afcom Cargo FZCO and the formation of an Indian MRO subsidiary, following board approvals dated December 17, 2025 and February 10, 2026.
What to watch
- AGM vote on director pay. Shareholder approval for the MD and WTD remuneration revisions and the ESOP scheme is proposed in the FY2025-26 Annual Report AGM notice.
- Warrant conversion. The 11,65,000 Convertible Equity Share Warrants allotted at ₹863.17 per warrant have conversion due within 18 months from allotment per SEBI ICDR Regulations, 2018.
- CIT(A) appeal outcome. The ₹6.59 crore income-tax demand for AY 2022-23 remains pending before CIT(A).
- Unutilised preferential proceeds. ₹59.52 crore of preferential allotment proceeds remained unutilised as at March 31, 2026, held in designated monitoring accounts.
- Outstanding warrant amount. 75% of the warrants amount, ₹75.42 crore, had not been received as at March 31, 2026.
- QIP proceeds deployment. The ₹199.85 crore raised in June 2026 is subject to Monitoring Agency Reports by Brickwork Ratings for the quarter ended June 30, 2026.
- Fleet onboarding. Four fleets are to be onboarded in FY2027, funded by the ₹104.48 crore raised in December 2025.
- Receivables commentary. The next quarterly transcript follows management's Q4 FY26 statement, dated March 2026, on receivables days and any receivables outstanding more than 6 months.
Bottom line: This is a disclosed and audited record, but the disclosures themselves carry the risk. The balance sheet's true leverage is roughly seven times what reported borrowings show once aircraft leases are counted, and the cash conversion from profit is thin. The governance question sits alongside: promoter holding fell sharply while the board sought higher director pay. Watch the AGM vote, the warrant conversion, and the next transcript's receivables commentary.