Jyoti Resins and Adhesives Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Jyoti Resins and Adhesives has a clean audit record and a growing cash pile, but the quality of that record is strained. Operating cash flow has lagged reported profit for nine years, the "debt-free" claim sits alongside ₹90 crore of unpaid carpenter benefits, and three blood-relative promoter-directors holding all executive board seats have seen combined remuneration rise 4.8x in six years, with the Chairman's approved monthly basic salary rising from ₹8,00,000 to ₹29,00,000. The FY2025-26 annual report also says the company has no subsidiary, even though it incorporated one in June 2025.

Key findings

  1. Operating cash flow has persistently lagged reported profit Major - Cumulative operating cash flow of ₹118 crore over FY2017-18 to FY2025-26 was only 0.44x cumulative PAT minus other income of ₹271 crore. The gap was widest in FY2023, when CFO of ₹0.80 crore covered just 0.02x of PAT of ₹46.44 crore. The company still reported being debt-free with a ₹165.93 crore treasury and recommended a ₹9 per share dividend, the third consecutive year at that level.
  2. Company claims "zero debt" while carrying ₹90 crore in unpaid carpenter benefits Major - Management acknowledged ₹90 crore in unpaid carpenter benefits and ₹145-150 crore in receivables in June 2026, with no reconciliation against the "debt-free since FY 2017-18" claim. Fixed deposits of ₹17,44,167 with RBL Bank are under lien for a bank guarantee to Sabarmati Gas Limited, an encumbrance not reflected in the treasury figure. The identical zero-debt disclosure repeats across four annual reports, while FY2021-22 disclosed a car loan and noted gearing "changed drastically due to non-utilization of CC limits".
  3. Three blood-relative promoter-directors hold all executive seats, with pay up 4.8x in six years Major - Father, son and wife/mother, Mr. Jagdish Nathalal Patel, Mr. Utkarsh Jagdishbhai Patel and Mrs. Jyotika Jagdish Patel, hold all three executive board positions as of 31 March 2026. Combined remuneration rose from ₹1.59 crore in FY2019-20 to ₹7.56 crore in FY2025-26. The Chairman's approved monthly basic salary rose from ₹8,00,000 to ₹29,00,000, with resolutions stating Schedule V limits "shall be treated as doubled".
  4. Receivables book of 185 days is a structural feature of the carpenter-loyalty scheme Major - Trade receivables stood at ₹159.15 crore as of FY2025-26, representing 185 days on a closing basis, which the company calls "a design feature". Receivables days rose from 133 in FY2024 to 185 in FY2026, while revenue grew from ₹257 crore to ₹315 crore. Management said in Q1 FY27 that debtor days in mature markets are 90-100 days but the blended figure is above 150 days, with no explanation for the gap.
  5. Company sought authority to lend up to ₹25 crore to directors' interests, while disclosing nil transactions Major - At the FY2021-22 AGM, shareholders passed a special resolution under Section 186 authorising loans, guarantees and security up to ₹25 crore over free reserves and securities premium. A separate Section 185 resolution authorised loans to directors' interests up to the Section 186 limits. Annual reports for FY2019-20, FY2020-21 and FY2021-22 state no loans were given under Section 186. In the half year ended 30 Sep 2021, loans were repaid by all three promoter-directors, with outstandings reported NIL.
  6. Company reported no subsidiaries for four years, but incorporated one in June 2025 Major - Annual reports from FY2019-20 through FY2022-23 each state the company has no subsidiary, joint venture or associate. On 12 June 2025, the company incorporated wholly owned subsidiary 'Jyoti Social Welfare Foundation', a Section 8 not-for-profit with paid-up capital of ₹1,00,000. The FY2025-26 Annual Report states "Company has no subsidiary company(ies) during the year under review".
  7. Company repeatedly revalues property upward, with depreciation up 45% Minor - "Revaluation of Building of Rs.19,41,150/- and of Office Premises of Rs.4,17,90,547/-" appears identically in both FY2020-21 and FY2021-22 annual reports. Depreciation expense rose from 1.09 crore in FY2023-24 to 1.59 crore in FY2024-25, a rise of approximately 45%, with no disclosure of whether this reflects the revaluation.
  8. Company disclosed a SEBI insider-trading compliance breach, since corrected Minor - The FY2024-25 Annual Report disclosed that the Structured Digital Database (SDD) mandated under SEBI insider-trading regulations had not been implemented, with the management stating the SDD had since been successfully implemented and that inspection from BSE Limited was awaited. The secretarial audit report dated 08 May 2025 confirmed the SDD had been successfully implemented as of that date. No other penalties or strictures were reported for FY2024-25 except this non-compliance.

What to watch

Bottom line: This is a profitable, dividend-paying company with a growing treasury and a clean audit opinion. The risk is that the record's headline numbers, zero debt, no subsidiaries, nil related-party transactions, are contradicted by the fine print: unpaid carpenter benefits, a newly incorporated subsidiary, and standing loan authorisations that are never reported as used. Read the cash flow statement and the related-party note with that gap in mind, and watch whether the FY2026-27 annual report reconciles the "debt-free" claim with the ₹90 crore liability.