Chandra Prabhu International’s record is thin on its face: reported profit depends on property sales, not operations. Two things deserve attention: the board is a family affair that lost its CEO and COO on the same day, and the cash-flow turnaround was funded by selling assets while paying down debt.
Key findings
- Exceptional gains from property sales dominate reported profit
Major- Exceptional gains of Rs. 298.16 Lacs, Rs. 239.18 Lacs from sale of investment property and Rs. 58.98 Lacs from sale of plant and equipment, were recognised in the standalone profit and loss in FY2025-26, against nil in the prior year. The depreciation charge halved to Rs. 65.67 Lacs from Rs. 109.82 Lacs, while net deferred tax assets rose from Rs. 53.60 Lacs to Rs. 134.85 Lacs, adding Rs. 82.12 Lacs of deferred tax income to earnings. The company adopted the Section 115BAA tax regime, which forgoes deductions for a lower rate, and has disclosed since FY2020-21 that it was “not likely to generate taxable income in the foreseeable future”. - Contingent liabilities are modest, with a new stamp-duty protest payment and a long-running VAT dispute nearing resolution
Minor- The company paid stamp duty of Rs. 124.50 Lacs under protest in FY2025-26, a new item not present in the prior year. A VAT demand of Rs. 17.75 Lacs for FY2013-14 was disposed of on appeal during FY2025-26, granting partial relief with the refund amount yet to be determined. A notice under Section 153C of the Income Tax Act for 2011-12 to 2017-18 was pending in the Delhi High Court as of FY2022-23, with management not expecting any significant adverse impact. - The group structure is flat, no subsidiary, associate or joint venture has existed since FY2019-20
Clean- Alsan Rubber & Chemicals Private Limited ceased to be a wholly owned subsidiary on 10 February 2020 and its investment was disposed of during FY2019-20. From FY2020-21 through FY2025-26, the company has had no subsidiary, associate or joint venture, and the auditor’s CARO report for FY2025-26 confirms the company is not required to prepare consolidated financial statements.
What to watch
- Board composition after Mrs. Hemlata Jain’s non-reappointment. Mrs. Hemlata Jain, liable to retire by rotation at the forthcoming AGM, has expressed unwillingness to seek re-appointment as disclosed in the FY2025-26 Annual Report.
- Statutory auditor term expiry. J P S & CO’s five-year appointment expires at the conclusion of the 42nd AGM in 2027.
- VAT refund determination. The refund amount from the disposed FY2013-14 VAT appeal remains to be determined as of the FY2025-26 Annual Report.
- Recovery of credit-impaired receivables. Rs. 2.06 crore in advances under reconciliation were outstanding as at FY2025-26, with a full provision recognised.
Bottom line: This is a trading business whose reported profit is carried by property sales, not operations. The risk sits in two places: a flat group structure with no subsidiaries since FY2019-20, and a cash-flow recovery that was funded by selling assets while repaying debt. Read the revenue line and the board composition with that in mind, and watch whether the auditor transition in 2027 brings fresh scrutiny.