Manoj Ceramic's record shows three years of clean audit opinions, but the cash story underneath is deeply negative: cumulative operating cash flow of ₹-95.57 crore against ₹32 crore of profit over four years. The company has routed ₹100.31 crore to suppliers as advances, and its only subsidiary was not audited in FY2025-26. Promoter dilution of 18.61 percentage points in one year and a debt profile that shifted from long-term to short-term complete the picture.
Key findings
- Operating cash flow is negative in all four years while profits stay positive, and management's capital-allocation claims don't reconcile
Major- Each year from FY23 to FY26 posted negative operating cash flow (₹-10.27 crore, ₹-12.59 crore, ₹-40.31 crore, ₹-32.40 crore) alongside positive profit. Free cash flow was also negative in each of those years. In the Q4 FY26 call, the CFO cited "prudent capital allocation, financial discipline" for reducing long-term borrowings, but did not disclose total debt, short-term borrowings, or any refinancing that may have shifted debt classification. - Three clean audit opinions sit alongside recurring CARO exceptions on verification, filings and internal audit
Major- The standalone and consolidated audit opinions were unqualified in FY2024, FY2025 and FY2026. CARO reported no physical verification of property, plant and equipment in FY2024 and FY2025, and verification by management personnel without asset description in FY2026. Inventory verification coverage was "inadequate" and bank-filing discrepancies persisted in all three years, while internal audit effectiveness "needs to improve". - The UK subsidiary, unaudited and management-certified, has swung from loss to profit with figures shifting between filings
Major- MCPL Ceramic Limited (UK) reported a FY2025-26 loss of GBP 9,728, while the consolidated auditor's report states FY26 net profit of ₹1.90 lakhs for the same entity. The FY2024-25 Board's Report shows a profit of GBP 8,716, against a consolidated net loss of ₹64.82 lakhs for the same period. The subsidiary was not audited in FY2025-26; its figures were management-certified. - Interest-free promoter brand deposit with no royalty paid in three years
Major- The company provided an interest-free Security and Performance Deposit of ₹6.75 crore to promoter Manoj D. Rakhasiya for use of the "MCPL" brand, with royalty of ₹NIL in FY2023-24, FY2024-25 and FY2025-26. Long-term loans from directors are unsecured, carry interest at mutually agreed rates, and have no fixed repayment terms. Loans to the UK subsidiary are unsecured, repayable at the end of three years from disbursement, with no security or collateral. - Promoter family dominates board and pay, public votes are near zero, and promoter holding fell 18.61 points through warrant conversions
Major- Promoter holding declined from 71.67% to 53.06% between FY2025 and FY2026. The FY2025-26 AGM seeks special resolutions to pay three promoter-family directors up to ₹21 lakh, ₹21 lakh and ₹18 lakh per annum, even in absence or inadequacy of profits. In the 10 March 2026 postal ballot, public non-institutional holders cast only 0.4710% of their votes, while promoters cast 100%. - Reported long-term debt reduction masks a shift into short-term borrowings and invoice discounting, while preference shares were pushed out by 15 years
Major- Long-term borrowings fell from ₹28.98 crore in FY2025 to ₹13.89 crore in FY2026, while short-term borrowings increased to support working capital. The 15% Non-Cumulative Redeemable Preference Shares had their redemption extended by 15 years at an EGM on 1 August 2023, moving redemption from April 2024/February 2025 to March 2034/January 2035. The company also uses Purchase Invoice Discounting where institutions settle supplier invoices and the company repays with finance charges. - Statutory auditor resigned in April 2023; replacement's term stated inconsistently
Minor- M/s. Dilip Kapadia & Co. resigned as Statutory Auditor effective 12 April 2023, and M/s. Chhogmal & Co. was appointed to fill the casual vacancy at an EOGM on 11 May 2023. The incoming auditor took into consideration issues raised by the outgoing auditors. The FY2023-24 and FY2024-25 Board's Reports state Chhogmal & Co. holds office until the 21st AGM, while the FY2025-26 report states until the 22nd AGM.
What to watch
- AGM votes on promoter remuneration. Special resolutions for three promoter-family directors, for 1 April 2026 to 7 June 2028, go to vote at the 22 September 2026 AGM.
- Trade credit insurance expiry. The SBI General Insurance policy covering domestic receivables expires 29 September 2026.
- Outstanding promoter warrants. 1,00,000 promoter warrants remained unconverted as at 31 March 2026.
- Cash credit renewals. The Axis Bank and Indian Bank cash credit facilities, both availed during FY2025-26 with one-year tenures, come up for renewal.
Bottom line: This is a record of clean audit opinions on paper, but the cash flow is the story, four straight years of negative operating cash flow while profits stay positive, with funds tied up in supplier advances and receivables that remain unprovided for. The risk is concentrated in how the company accounts for cash and related parties, and in a debt profile that has quietly moved from long-term to short-term. Watch the AGM votes, the insurance renewal, and the next annual report's treatment of those receivables and advances.