Parmeshwar Metal Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Parmeshwar Metal's audited record shows clean opinions in both FY2025-26 and FY2024-25, and promoter shares are unpledged. But the auditor's own annexures record recurring exceptions, and the company is seeking approval for related-party transaction limits that dwarf its profit while actual activity remains negligible. Tax demands of ₹44.2 crore, including an ₹18.5 crore order not yet appealed, and a nine-year cash conversion of 0.24x reported profit round out the picture.

Key findings

  1. Shareholders asked to approve ₹765 crore of related-party limits Major - The FY2026-27 omnibus resolution seeks annual limits of ₹250 crore with Parmeshwar Recycling, ₹200 crore with Shree Mahadev Metal, ₹125 crore with Parmeshwar Copperx (a subsidiary incorporated August 17, 2026), and smaller limits with six other promoter-linked entities, totalling ₹765 crore. The explanatory statement records "Not Applicable" for turnover percentage, loan details, and arm's length pricing. Actual disclosed activity is negligible: FY2025-26 transactions with Avirat Metal were ₹7.56 lakhs with nothing outstanding at year end.
  2. Tax authorities demand ₹44.2 crore; the largest ₹18.5 crore order is unappealed Major - GST orders dated March 25, 2026 and March 30, 2026 demand ₹1853.08 lacs for April 2019 to March 2020, with no appeal filed as at March 31, 2026. Older GST orders for 2018-21 demand ₹1693.2 lacs and are under appeal. On June 15, 2026, the Commissioner (Appeals) confirmed a ₹1.35 crore demand for alleged fraudulent input tax credit, which the company plans to appeal.
  3. Nine years of profit produced only ₹18 crore of operating cash flow Major - Cumulative CFO was ₹18 crore against ₹73 crore of PAT over nine years, a 0.24x conversion. FY25 PAT rose to ₹10.98 crore from ₹7.13 crore, but CFO turned negative at -₹4.17 crore. FY26 CFO recovered to ₹21.64 crore against PAT of ₹32.49 crore.
  4. Clean audit opinions sit alongside recurring exceptions in the auditor's own annexures Major - Shah & Shah issued an unqualified opinion for FY2025-26 dated May 8, 2026, and Gattani & Associates did the same for FY2024-25. But the FY2025-26 CARO states bank-filed working capital statements disagree with the books for inventories, debtors, and creditors, and the FY2024-25 CARO states they are "NOT in agreement". The FY2025-26 audit trail was "NOT enabled at the database level" for payroll and consolidation, reversing the prior year's clean position.
  5. Reported debt understates economic obligations Major - The working capital loan from State Bank of India is repayable on demand, and a March 16, 2026 agreement enhanced facilities to ₹70.25 crore. Deposits of ₹521.61 lacs held under lien with banks appear under Other Bank Balances as of FY2024-25. CRISIL treated a ₹1.00 crore promoter unsecured loan as debt, calling it need-based.
  6. Auditor changed mid-year; new firm appointed for five years Minor - Gattani & Associates resigned during FY2025-26 citing "pre-occupancy of work" with no other issues raised. The Board recommended Shah & Shah on August 20, 2025 for a five-year term, and the new firm signed the FY2025-26 report.
  7. Promoter holding fell 24.30 points to 72.03%, but no shares are pledged Minor - The drop is explained by 86,000 shares bought in the prior year not being credited to the promoter's demat account by March 31, 2025; they were credited later. Promoters actively bought shares through the year, including 86,000 shares on April 1, 2025 and 58,000 shares on December 3, 2025. Pledge stood at 0.00% in both years.

What to watch

Bottom line: This is a record with clean audit opinions and unpledged promoter holdings, but the cash conversion of reported profit is weak and the auditor's own annexures document exceptions the opinions do not. The risk sits in the gap between approved related-party limits and actual activity, and in the unappealed tax demand. Watch the AGM vote and the appeals.