Monika Alcobev’s record is clean on audit: six years of unqualified opinions, no fraud or wilful default, and a CARO report that reads like a compliance checklist. The real tension is between profit and cash, reported earnings have risen for four straight years, yet operating cash flow has been negative in every one of them, and the company continues to pay dividends and fund working-capital expansion from sources other than its own operations.
Key findings
- Operating cash flow has been deeply negative for four years despite rising profits
Major- Cumulative operating cash flow from FY2023 through FY2026 was ₹-183 crore against cumulative profit of ₹87 crore, a cash conversion ratio of -2.11 times. In FY2026 alone, cash from operations was ₹-102 crore while profit stood at ₹32.14 crore, and free cash flow was negative in every year of the four-year window. The Board nevertheless recommended a final dividend of ₹1 per share for FY2025-26, requiring a ₹2.15 crore cash outflow, and paid ₹2.33 crore in dividends in the prior year when free cash flow was ₹-39.46 crore. - Promoter entities are both the largest unsecured lender and a major customer and supplier
Minor- Unsecured, interest-free, on-demand loans from directors Bhimji Nanji Patel and Kunal Bhimji Patel totalled 10.67 crore outstanding as at 31 March 2026. The company sold goods worth 6.5 crore to Infinity Global Supply Chain Limited, a promoter-group firm, and purchased storage charges of 7.49 crore and office rent of ₹70.77 lakh from the same entity in FY26, with trade receivables of 4.65 crore outstanding at year-end. - Promoter family holds 62.10% and two independent directors resigned in quick succession
Minor- Promoter and promoter group shareholding stood at 62.10% as of 31 March 2026, down from 79.96% a year earlier following the IPO. Independent directors Nayan Rawal and Prasannakumar Gawde resigned effective 13 November 2025 and 9 December 2025 respectively, both citing pre-occupation, and were replaced within weeks. Total short-term employee benefits to Key Managerial Personnel rose to 4.44 crore in FY26 from 1.44 crore in FY25, an increase of more than three times. - The company switched to a lower concessional tax regime mid-stream based on a legal opinion
Minor- Monika Alcobev reassessed its eligibility to be taxed under Section 115BAB instead of Section 115BAA adopted in the previous year, based on a legal opinion obtained during FY2025-26, and treated the change as a prospective estimate change under AS-5. The auditor issued an Emphasis of Matter, a special call-out in the audit report, on the tax-regime change without modifying the opinion, noting the interpretation risk. The excess provision for the prior year will be given effect in the books post completion of assessment, if any. - Contingent liabilities are modest and legacy, but a fresh ₹2.82 crore income-tax demand arrived after the reporting period
Minor- Disputed Central Sales Tax dues of ₹15.70 lakhs for FY2017-18 and an income-tax liability of ₹17.82 lakhs for FY2018-19, both pertaining to the predecessor firm, were the only contingent liabilities as of 31 March 2026. On 27 May 2026, the company disclosed a tax demand of ₹2,82,29,180 under Section 143(1) read with Section 156 from CPC Bengaluru and stated it intends to file an appeal. - Audit opinions are unqualified; CARO responses are clean on fraud, wilful default, and fund diversion
Clean- Statutory auditors Shah Gupta & Co. issued an unqualified opinion for FY26 with no qualifications, reservations, or adverse remarks, though the report contains an Emphasis of Matter on the Company's tax-regime reassessment. The CARO report confirms no fraud was noticed, the Company has not been declared a wilful defaulter, no benami property proceedings are pending, and no funds raised on a short-term basis were used for long-term purposes. The accounting software audit trail operated throughout FY26 with no instance of tampering.
What to watch
- Income-tax demand of ₹2.82 crore. The demand disclosed on 27 May 2026 is under appeal, with no scheduled hearing date stated as of the FY2025-26 reporting period.
- Prior-year excess tax provision. Resolution awaits completion of assessment for FY2024-25, with effect to be given in books post-assessment, no scheduled date as of the FY2025-26 reporting period.
- ESOS-2026 grants. The scheme authorising up to 10,00,000 options was approved on 22 March 2026, but no options had been granted as of the reporting date.
Bottom line: This is a disclosed and audited record with a genuinely clean audit trail and no sign of fraud or diversion. The risk is structural: four years of reported profit that do not convert to operating cash, while dividends and working capital are funded from other sources. Watch the cash-flow line against profit, and whether the fresh tax demand and the unresolved prior-year tax provision create liabilities the cash flow cannot easily absorb.