Hindusthan Insulators & Industries presents a record of seven consecutive unqualified audit opinions and clean internal-control reports, yet the same filings show a company that lost money in five of those years and reported a consolidated loss of ₹45.62 crore in FY2025-26. Three things deserve attention: a ₹155 crore related-party borrowing from HEIL is being put to shareholders even as the same annual report claims no material related-party transactions occurred, the company sold its only material subsidiary at negative net worth while booking a ₹47.05 crore exceptional loss, and Mr. Raghavendra Anant Mody's remuneration was raised three times across five consecutive loss-making years.
Key findings
- A ₹155 crore related-party borrowing contradicts the board's own RPT claim
Major- As of March 31, 2026, borrowings from Hindusthan Engineering & Industries Limited (HEIL), a related party, stood at ₹71.17 crore, and the company is seeking shareholder approval to borrow up to ₹155 crore more in tranches. The FY2025-26 Board's Report states that "no material related party transactions requiring shareholder approval" occurred, while the same annual report's AGM notice seeks approval for exactly such a transaction. The materiality threshold is ₹33.85 crore, making the proposed borrowing a material related party transaction requiring shareholder approval. - The only material subsidiary was sold at negative net worth
Major- HSCL, the company's material unlisted subsidiary, was sold to DCM Shriram Limited on August 25, 2025, and as of March 31, 2026 the company had no subsidiary, joint venture or associate. HSCL's net worth at March 31, 2025 was negative 7.61 crore against consolidated net worth of 337.55 crore, and its PAT for FY2024-25 was negative 28.46 crore. The consolidated PAT for the latest year was negative ₹45.62 crore versus standalone PAT of positive ₹28.92 crore, a difference of 163% at subsidiaries. - Promoter pay rose three times across five loss-making years
Major- Mr. Raghavendra Anant Mody's remuneration was increased from ₹1.21 crore to ₹1.80 crore effective July 1, 2021, then to ₹1.85 crore from October 3, 2023, then to ₹2.10 crore effective April 1, 2025, each with a minimum-remuneration clause payable notwithstanding absence or inadequacy of profits. The company reported negative PAT in FY2021-22, FY2022-23, FY2023-24, FY2024-25, and the latest year, the same window in which his remuneration was raised three times. On the February 6, 2026 postal ballot, public non-institution shareholders holding 356,307 shares cast only 425 votes across all three resolutions, while promoters cast 1,077,045 votes. - A ₹95.19 crore preference-share issue sits at only its discounted present value
Major- The company allotted 9,51,89,700 1% Redeemable, Non-Convertible, Non-Cumulative Preference Shares of ₹10 each to HEIL on December 12, 2018, redeemable at par at the end of 20 years. The liability component of the ₹95.19 crore issue is carried at present value of ₹35.37 crore as at FY2024-25, using a 7.50% discount rate, with interest expense of ₹2.47 crore recognised during the year. Term loans and GECL loans from SBI, Union Bank, and others are secured by a corporate guarantee from holding company Hindusthan Urban Infrastructure Ltd.. - Reported profits are shaped by large exceptional items and reserve movements
Major- The company recognised an exceptional loss of ₹47.05 crore in FY2025-26 on sale of its shareholding in HSCL. It also set off an accumulated deficit in Retained Earnings of ₹22.29 crore against General Reserves of ₹395.38 crore during FY2025-26, fully adjusting the deficit. In FY2024-25, the company recognised a profit of 37.49 crore as an exceptional item from sale of the Khurda Electrical Conductors unit, and an exceptional loss of 11.49 crore on the Coal Gas Fire Plant. - Escrow-locked funds of ₹38.59 crore sit against disputed demands
Minor- As of FY2025-26, ₹38.59 crore remains in an escrow account towards pending Income Tax demands of HSCL (₹29.09 crore) and Gujarat Industrial Development Corporation non-regulation charges (₹10.7 crore). Claims raised by DCM relating to losses during August 1-25, 2025 are under negotiation; ascertainable losses amount to ₹1.29 crore, against which the company has made a provision of ₹75.18 lakhs, or 58.5%. No proceedings are pending under the Insolvency and Bankruptcy Code, 2016 as of FY2025-26. - Seven years of clean audit opinions, with no key audit matters ever identified
Minor- K.N. Gutgutia & Co. issued an unqualified opinion on the standalone financial statements for each year from FY2019-20 through FY2025-26, with no qualifications, reservations, adverse remarks, or disclaimers in any year. The auditor stated "there are no key audit matters to be communicated in our report" in every year from FY2019-20 through FY2024-25, and no KAMs were identified in FY2025-26. The auditor also issued an unqualified opinion on internal financial controls over financial reporting as operating effectively for every year from FY2019-20 through FY2025-26. - Revenue is concentrated in a few customers, and receivables have aged past six months
Minor- Two customers contributed more than 10% of consolidated revenue in FY2024-25 (aggregate ₹50.45 crore), and two customers contributed more than 10% in FY2023-24 (aggregate ₹31.05 crore). The company wrote off bad debts of 22.15 crore in FY2024-25, described as "outstanding over a long period" and "considered time barred and not recoverable". Consolidated trade receivables past due for more than 6 months stood at ₹9.48 crore as at March 31, 2025, down from ₹31.14 crore as at March 31, 2024.
What to watch
- HEIL borrowing vote. Shareholder vote on the ₹155 crore HEIL borrowing resolution at the 66th Annual General Meeting convened on September 08, 2026.
- Chairman re-appointment. 66th AGM scheduled for September 2026 to vote on re-appointment of Mr. Raghavendra Anant Mody as Chairman & Whole-time Director for three years from October 3, 2026 at ₹2.10 crore per annum with minimum-remuneration clause.
- DCM claims. Resolution of DCM claims for August 1-25, 2025 losses (₹1.29 crore ascertainable, ₹75.18 lakhs provided), negotiation ongoing as of FY2025-26 Annual Report.
- Escrow release. Release or application of the ₹38.59 crore escrow account against HSCL Income Tax demands and GIDC charges, status as of FY2025-26 Annual Report.
- Mandideep expansion. Completion of the Mandideep Insulators Plant capacity expansion from 16,500 MT to 36,000 MT, proposed to be completed by December 2026.
Bottom line: This is a disclosed and audited record with clean opinions across seven years, but the clean opinions sit alongside a consolidated loss of ₹45.62 crore and a board report that contradicts its own AGM notice on related-party transactions. The risk is concentrated in the promoter ecosystem: the HEIL borrowing, the subsidiary sale at negative net worth, and the pay raises across loss-making years all point the same direction. Watch the AGM votes and the DCM claim resolution.