Tirupati Fin-Lease’s record carries six years of unqualified audit opinions and clean CARO reports, but the cash engine is not working: operating cash flow has been deeply negative for two years running, the company is funding long-term investments with rising debt, and two statutory auditors resigned mid-term within 21 months.
Key findings
- Operating cash flows are deeply negative and do not support reported profits
Major- Operating cash flow was negative ₹3.34 crore against a profit of ₹0.48 crore in FY2025-26, a ratio of -6.96 times, and negative ₹2.44 crore against ₹0.66 crore in FY2024-25. In FY2025-26, cash outflow for purchase of long-term investments was ₹138.55 crore, up from ₹52.25 crore, while cash flow from long-term borrowings received or repaid was ₹477.19 crore, up from ₹300.85 crore, and finance costs rose to ₹2.48 crore from ₹0.92 crore. Return on capital employed fell to 3.78% in FY2025-26 from 7.23% the year before and 22.54% in FY2023-24. - Two statutory auditors resigned mid-term within 21 months
Major- M/s. Meet B Shah & Associates, appointed for a term through FY2024-25, resigned on 14 August 2024. M/s. STAP & Co. was appointed the same day and then given a five-year term from the 31st AGM on 28 September 2024 through FY2028-29, but resigned on 18 May 2026, effective 23 May 2026, citing “inability to continue… in view of other professional commitments and assignments”. The Board appointed M/s. A D A & Associates on 23 May 2026 and proposes a five-year term to FY2031, while auditor fees for FY2025-26 are not disclosed. - Segment disclosures contradict the stated business activity
Minor- The company’s standalone financial statements for FY2021-22 and FY2020-21 describe its single operating segment as “manufacturing and sale of Caramel Colour,” while the same annual reports describe the business as trading and investment in shares and securities and finance. The company stated in FY2022-23 that it applied Ind AS 115 and determined no change was needed in its revenue recognition methodology. - Accounting policies contain internal contradictions
Minor- The depreciation policy is stated as Written Down Value Method per Schedule II of the Companies Act, 2013, but the fixed-asset note states depreciation is provided on Straight Line Method per Schedule XIV. Segment reporting again defines the single segment as “manufacturing and sale of Caramel Colour” while the business description states “Trading and investment in share market”. In FY2022-23, the company reclassified certain accounts from Trade Payables to Unsecured Borrowings “to give proper effect financial transactions”. - Promoter-family directors hold dual roles with unchanged pay
Minor- Mr. Bajranglal Balkishan Agarwal and Mrs. Pushpadevi Bajranglal Agarwal each received ₹3 lakhs per annum in every year from FY2021 through FY2025, with the percentage increase stated as NIL. Mr. Agarwal serves simultaneously as Whole Time Director and CFO, signing the FY2025 consolidated financial statements in both capacities. Every shareholder resolution from December 2020 through August 2025 passed with 100% of votes polled in favour, while public non-institution shareholders cast only 30.9% and 26.3% of their holdings at the 2023 and 2022 AGMs respectively.
Bottom line: This is a disclosed and audited record with six clean audit opinions and no fraud flags in the CARO reports. The risk is twofold: reported profits are not converting to cash, and the company is scaling long-term investments with borrowed money while finance costs rise. The auditor churn adds a layer of uncertainty around continuity of oversight. Watch the reappointment of the promoter director and whether the new auditor stays.