High Energy Batteries’ record is a disclosed one: six years of unqualified audit opinions, a clean promoter holding with zero pledge, and a defence order book that has grown in confirmed orders. Three things deserve attention. Revenue lives and dies by government defence orders, which stretch receivables to 125 days and have produced a decade of operating cash flow that covers barely half of reported operating profit. A suspended division sits with ₹4.12 crore in cumulative impairment provisions and no reversal. And a ₹1.25 crore exceptional charge for new Labour Code liabilities has landed in FY26, with the actual cash outflow still ahead.
Key findings
- Revenue depends on government defence orders, with receivables at 125 days and cash flow lagging profit
Minor- The Navy and Naval Research Labs supplied around 60% of revenue in FY26, though this share has fluctuated, falling to 45% in FY24. Receivable days rose to 125 in FY26 from 120 in FY25, and cumulative operating cash flow of ₹100 crore covered only 52% of cumulative EBITDA of ₹192 crore over the ten-year period. Revenue recognised from opening contract advances was nil in FY26, against ₹1.46 crore a year earlier. - Suspended Lead Acid Batteries Division carries ₹4.12 crore impairment provision
Minor- Operations remained suspended through FY26, and the cumulative impairment provision stood at ₹4.12 crore as of 31 March 2025, based on realisable value certified by a Registered Valuer. No further provision or reversal was recorded in FY26. In FY24, a provision of ₹1.02 crore was recognised for plant and equipment, while ₹30.03 lakh was reversed for inventories sold as scrap. - A ₹1.25 crore exceptional charge for new Labour Code liabilities hit FY26, alongside a long-standing tax-rate election
Minor- The company recognised an additional liability of ₹1.25 crore for gratuity and leave benefits under the four Labour Codes notified in November 2025, presented as an exceptional item. The best estimate of the next year’s gratuity contribution rose from ₹20 lakh in FY25 to ₹1.58 crore in FY26. The company has applied the concessional 25.168% tax rate under Section 115BAA since FY20, and previous-year figures were regrouped in FY23, FY25, and FY26. - The same audit firm has served since FY2020 with a compliant second term and no disclosed adverse events
Minor- M/s. Maharaj N R Suresh and Co LLP has been the statutory auditor continuously from FY20 through FY26. A second five-year term was approved at the 61st AGM on 29 June 2022 with 99.99% votes in favour. The secretarial auditor changed in March 2023 and the internal auditor changed from FY24, with no resignation or rotation event disclosed for the statutory auditor. - Promoter holding is unpledged, board conduct is routine, and dissent is negligible
Clean- Promoter shareholding stood at 43.07% as of FY26 with zero pledge. No director is related to any other, and all Board decisions were unanimous during FY26. Shareholder resolutions at the 27 June 2026 AGM passed with over 99% votes in favour; the highest dissent was 0.67% on commission to Non-Executive Directors. The re-appointment of the Managing Director via postal ballot on 24 March 2026 received 99.99% votes in favour.
What to watch
- Labour Code cash outflow. Actual cash outflow against the ₹1.25 crore exceptional liability recognised in FY26 is yet to occur.
Bottom line: This is a straightforward defence supplier with a clean governance record and a balance sheet that carries no promoter pledge and negligible debt. The character of the risk is structural, not hidden: a single-buyer revenue base that turns profit into receivables rather than cash, a suspended division whose provisions have not moved, and a fresh labour-law liability whose cash impact is still to come. Watch the order book and the tax appeals for the next move.