Kanoria Energy & Infrastructure’s record is a study in contrasts: a sudden two-year surge in operating cash flow has reversed a multi-year stretch where cash failed to cover profit, while a licensing dispute with Gujarat Composite Ltd has escalated into competing claims exceeding ₹120 crore each, and the company has stopped accruing interest on its recoverable since FY2014-15.
Key findings
- Operating cash flow turned positive only in the last two years after years of failing to cover profit
Major- In each of FY22, FY23 and FY24, operating cash flow was negative at ₹-3.16 crore, ₹-7.99 crore and ₹-1.28 crore respectively, while reported profit was positive in every one of those years. The picture flipped in FY25 and FY26, when cash flow of ₹22.95 crore and ₹58.17 crore covered profit 6.45 times and 149 times over. - A licensing dispute has escalated into competing claims above ₹120 crore each
Major- The amount recoverable from Gujarat Composite Ltd under a 2005 licensing agreement rose from ₹51.43 crore in March 2020 to ₹119.59 crore in March 2026, of which only ₹17.2 crore is provided. On 21 March 2026, GCL filed a suit against the company for recovery of ₹122.62 crore plus 12% interest. The company stopped charging interest on the balance recoverable from GCL from FY2014-15 onwards and has not provided for bonus and leave-and-license fees recoverable from GCL since FY2014-15. - Revenue recognition is a recurring Key Audit Matter across every year reviewed
Minor- Revenue recognition is identified as a Key Audit Matter, an area requiring the most auditor judgement, in the standalone auditor’s report for each of the six fiscal years from FY2019-20 through FY2025-26. The company operates in a single reportable segment, manufacturing and laying of Asbestos Cement Products, across all periods. - Promoter family holds 73.95% with zero pledge and near-unanimous votes on remuneration
Minor- Promoter and promoter group shareholding remained at 73.95% from FY2022 through FY2026 with zero pledge throughout. All shareholder resolutions on promoter-family appointments and remuneration between FY2020 and FY2026 passed with at least 99.99% votes in favour. The board routinely invokes the inadequate-profit clause under Schedule V to approve promoter-family remuneration, including re-appointment of the MD’s son as Whole Time Director at up to ₹30 lakh per annum.
What to watch
- GCL suit outcome. The suit filed by Gujarat Composite Ltd on 21 March 2026 for recovery of ₹122.62 crore plus 12% interest is before the Commercial Court, Ahmedabad.
- Directors’ SAT appeal. Outcome of the appeal filed by Sanjay Kumar Kanoria and Priyadarshinee Kanoria before the Securities Appellate Tribunal, Mumbai, against the BSE delisting order dated 8 January 2024.
Bottom line: This is a disclosed record with a genuine cash-flow turnaround in the most recent two years and a statutory auditor retained without issue since 2017. The risk sits in two places: a licensing dispute that has grown into competing claims above ₹120 crore each, with the company no longer accruing interest on its side, and a pattern of capital allocation, a stalled distillery advance and a newly approved ethanol plant, that concentrates resources in long-gestation projects. Watch the GCL suit and the pace of the ethanol investment.