Adani Enterprises' consolidated audit opinion has been qualified for four straight years, and operating cash flow has dwindled to a fraction of reported profit even as the group ramps up debt-funded capex. The record is shaped by large exceptional gains, a web of related-party balances, and multiple ongoing criminal and regulatory proceedings that keep the auditor's internal-controls opinion open-ended.
Key findings
- Consolidated audit opinion qualified for four years, audit-trail gaps persist
Critical- The consolidated audit opinion has been qualified every year from FY2022-23 through FY2025-26. The qualification cites subsidiary MIAL, where MCA investigations and a CBI chargesheet allege misuse of ₹845.76 crores in works contracts, and the auditor's IFC opinion on MIAL is qualified because the implication on controls will be known only after investigations conclude. In FY2025-26, the parent and certain subsidiaries did not enable the audit-trail feature for direct database changes from 27 May 2025 to 12 December 2025 because evidence was purged due to storage constraints. - Operating cash flow collapsed to 0.24x PAT, capex and debt keep rising
Major- Consolidated CFO/PAT fell from 8.01x in FY23 to 0.24x in FY26, with CFO at ₹2,357cr against PAT of ₹9,694cr. Consolidated net debt/EBITDA reached 6.8x, or 8.2x including leases, with gross borrowings of ₹106,622cr. Management guided FY27 capex at \~₹40,000cr and stated FY26 capex was close to 95% of target. - Exceptional gains dominate profit, large unrecognised tax assets sit on the balance sheet
Major- The company reported a consolidated exceptional gain of ₹8,600.81 crore from the sale of its remaining stake in AWL Agri Business Limited and a further ₹614.56 crore from an NCLT-approved amalgamation. Management stated that consolidated profit before tax excluding these exceptional gains of ₹9,215 crores was ₹4,309 crore. Unrecognised deferred tax assets on carried-forward losses rose to ₹2,259.99 crore as of March 31, 2026, and unabsorbed depreciation carryforwards rose to ₹11,091.23 crore. - Revenue quality strained by volatile other income and rising receivables
Major- Other income contributed 86.4% of profit before tax in FY2026, up from 85.4% in FY2025. Trade receivables days outstanding increased from 35.85 days in FY2025 to 45.57 days in FY2026. Consolidated materials-in-transit within inventories swung from ₹99.49 crore at March 2025 to ₹7,362.72 crore at March 2026. - Debt-like obligations beyond reported borrowings are substantial
Major- Consolidated borrowings total ₹106,622 crore with additional lease liabilities of ₹19,920 crore, yet management reports net external debt to EBITDA at 3.9x. Standalone corporate guarantees given to subsidiaries and related parties rose from ₹3,761.87 crore in March 2022 to ₹28,161.14 crore in March 2026. Subsidiary Adani Airport Holdings Ltd had Unsecured Perpetual Securities of ₹2,624 crore classified as equity despite carrying cumulative 8% p.a. distributions, fully repaid during FY2025-26. - Related-party loans, guarantees, and trade balances expand sharply
Major- Standalone trade receivables from related parties rose from ₹828.00 crore to ₹2,807.99 crore in FY2025-26. Accrued interest income on loans given to related parties added to loan balances rose from ₹1,076.67 crore in FY24 to ₹1,137.06 crore in FY25 to ₹1,933.80 crore in FY26. At the 33rd AGM on 24 June 2025, public institutional shareholders voted 20.4% against material RPT resolutions with Adani Infra (India) Ltd, Adani Infra Management Services Ltd, Adani Properties Pvt Ltd, and several Australian entities, while voting only 2.8%-3.3% against resolutions with AdaniConnex, Parsa Kente Collieries, and Carmichael Rail Network Trust. - Multiple criminal and regulatory proceedings remain ongoing
Major- A U.S. criminal indictment charges promoter Gautam S. Adani with securities fraud conspiracy and wire fraud, and the SEC filed a civil complaint for securities law violations; both matters are pending. The CBI filed a chargesheet against MIAL alleging diversion of ₹845.76 crore through contracts. SEBI concluded two show-cause notices on September 18, 2025, finding no non-compliance and imposing no penalty. - Goodwill impairment charges escalate, management sees no impairment in eroded subsidiaries
Major- In FY2025-26, the company recognised an impairment provision of ₹378.60 crore on its investment in AMG Media Networks Limited. As at 31 March 2024, management stated the net worth of certain subsidiaries had been eroded but considered the impairment temporary and recorded no impairment. As at 31 March 2026, certain subsidiaries carried unabsorbed depreciation carryforwards of ₹11,091.23 crore with no expiry date.
What to watch
- MIAL investigations. Outcome of MCA investigations and CBI chargesheet proceedings, with no scheduled date as of the FY2025-26 reporting period.
- U.S. proceedings. Pending DOJ criminal indictment and SEC civil complaint against Gautam S. Adani, with no scheduled trial date as of the FY2025-26 reporting period.
- OFAC investigation. Pending civil investigation into transactions involving U.S. financial institutions, with no scheduled resolution date as of the FY2025-26 reporting period.
- Composite Scheme. Completion and accounting effect of the Composite Scheme of Arrangement with appointed date April 1, 2026.
- Airport business demerger. Management stated the demerger could be ready around FY2027-FY2028, with timing to be determined by the Board.
Bottom line: This is a record where the auditor has declined to give a clean opinion for four years, and operating cash generation has shrunk to a fraction of reported profit while debt and capex commitments grow. The profit-and-loss account leans heavily on exceptional gains and other income, and the balance sheet carries large unrecognised tax assets alongside rising related-party exposures. Watch the unresolved investigations and the U.S. criminal and civil proceedings, their outcomes will determine whether the auditor's open-ended internal-controls qualification can finally be closed.