Atul Auto Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Atul Auto’s FY2025-26 record carries a clean audit opinion, but the clean opinion sits alongside a proposed related-party deal that is 333% of the counterparty’s turnover, a “debt-free” claim that ignores consolidated debt, and nine years of profits that have not converted into operating cash. The most serious issue is a proposed ₹120 crore dealership arrangement with a firm incorporated in September 2025, which the Board’s own report says does not exist as a material transaction.

Key findings

  1. A ₹120 crore related-party deal with a new firm is 333% of its turnover Critical - The FY2026-27 AGM notice seeks approval for material related-party transactions with Khushbu Auto, a partnership firm owned by promoter-group members, for sale of vehicles, spares and services up to ₹120 crore. That amount is 333% of Khushbu Auto’s provisional FY2025-26 turnover of 37.92 crore, for a firm incorporated on September 04, 2025. The FY2025-26 Board’s Report states there were no material related-party transactions during the year, and AOC-2 shows NIL material contracts.
  2. The parent calls itself “debt-free” while the group carries ₹109.53 crore of debt Major - The Board’s Report claims “debt-free status” while disclosing unutilised working capital facilities of ₹3,000 lacs from IDBI Bank and ₹750 lacs from ICICI Bank. The consolidated capital management table shows total debt of ₹10,953 lacs at 31-Mar-25, down from ₹14,425 lacs a year earlier. The parent also retains loss-sharing obligations on financed vehicles under two risk-sharing arrangements with Cholamandalam, and the FY2021-22 liquidity note stating “no outstanding term borrowings” is inconsistent with the EXIM and ICICI term loans disclosed in the same statements.
  3. Nine years of profits have not converted into operating cash Major - Cumulative CFO over nine years was ₹39 crore against cumulative PAT of ₹187 crore and EBITDA of ₹414 crore. FY2022 standalone CFO was negative ₹169 crore against a net loss of ₹25.48 crore, and FY2023 and FY2024 also saw negative CFO. The last two years improved: FY2026 CFO was ₹39.99 crore against PAT of ₹43.23 crore, and FY2025 CFO was ₹25.26 crore against PAT of ₹18.34 crore.
  4. The parent funds loss-making Atul Greentech through on-demand deposits with no repayment schedule Major - Atul Auto gave an Inter Corporate Deposit of ₹74.2 crore to Atul Greentech during FY2025-26, of which ₹67.2 crore was repaid and ₹7 crore remained outstanding at March 31, 2026. The CARO report states no repayment schedule was stipulated for the loan, so regularity of repayment does not arise. Atul Greentech’s losses widened from 4.37 crore in FY23 to 15.93 crore in FY25, and Atul Auto also guaranteed ₹11 crore of its credit facilities to Yes Bank.
  5. The captive NBFC is consolidated from management-prepared data and its borrowings carry parent guarantees Major - Khushbu Auto Finance, a wholly-owned subsidiary with net worth of ₹137 crore as on March 31, 2025, was consolidated using management-provided Ind AS-converted data rather than audited financials, reflecting total assets of ₹262.01 crore and PAT of ₹2.55 crore as at March 31, 2026. Its borrowings from four banks are secured by its receivables with corporate guarantees from Atul Auto as 100% equity holder. The subsidiary’s secretarial audits noted a vacant Company Secretary position from October 2023 and only one Independent Director against a requirement of two in FY2021-22.
  6. Common-control pooling restatement created a capital reserve Major - Atul Auto acquired the L5 Electric Three-Wheeler Division of Atul Greentech for ₹35.26 crore, effective 15 January 2026, and recorded a capital reserve under pooling-of-interest. The FY2025-26 standalone statements restated FY2024-25 comparatives as if the acquisition occurred from 1 April 2024, with an Emphasis of Matter noting this. Investment property fair values relied on a valuer report dated 27 June 2017 through FY2024-25, changed only in FY2025-26 to a report dated 7 October 2022.
  7. Clean audit opinions coexist with audit-trail caveats and an internal-audit gap Major - Maharishi & Co. issued unqualified opinions for FY2025-26 with no Key Audit Matters in the standalone report and no Emphasis of Matter. The FY2024-25 report noted unauthorised database changes by a super user do not carry a concurrent real-time audit trail, and the FY2023-24 report stated the audit trail feature was not enabled at the database level. CARO for FY2022-23 states no internal audit was carried out by an external CA, and title deeds of certain immovable properties were not held in the company's name, including the approach road to the Bhayla factory site held since 2014.
  8. Disputed tax demands and layered guarantees sit alongside partly unprovided litigation Minor - Atul Auto filed a CIRP petition against former dealer Echo Motors for recovery of ₹3,35,36,330, with ₹2,30,03,214 already provided and ₹1,05,33,116 unprovided as of 12 Mar 2025. NCLT Guwahati admitted the petition on 20 Aug 2025. The company surrendered an FY2019-20 income tax matter under VSV Scheme 2.0 in April 2026, and provided additional guarantees of INR 3,900 Lacs during FY2023-24.

What to watch

Bottom line: This is an audited record with a clean opinion, but the clean opinion masks a concentrated set of risks: a related-party deal that dwarfs its counterparty, a debt-free claim that does not hold at group level, and profits that have only recently begun to convert into cash. The character of the risk is disclosure, what the Board reports and what the numbers show are not always the same thing. Watch the Khushbu Auto approval vote, the KAFL preference redemption, and whether the restated comparatives survive the next audit.