Competent Automobiles Company Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Competent Automobiles' record shows a promoter family that controls the board and repeatedly routes remuneration, related-party appointments and place-of-profit roles to its own members, with public shareholder dissent concentrated in the one vote where promoters voted in favor. The company's related-party dealings are dominated by these recurring family arrangements, while it simultaneously borrowed from its directors and acquired a promoter-controlled entity for ₹21,99,99,990 (₹42 per share including ₹32 premium). Recurring exceptional items, lease remeasurement credits and prior-period tax provisions repeatedly shape reported profit, and the company's own disclosures show restated comparatives and reclassifications across multiple years. The statutory auditor rotation completed on schedule in FY2022-23 with no resignations or adverse auditor actions reported through FY2025-26.

Key findings

  1. Promoter family controls the board and routes roles to its own members Major - Promoter and promoter group shareholding stood at 74.92% as of the latest year, unchanged from the prior year, with pledge at 0.00%. Mrs. Nisha Mehta, sister of Chairman & Managing Director Mr. Raj Chopra, was appointed Additional Director and Whole-Time Director on 14 August 2026 for 5 years at Rs.1,25,000 per month plus car, driver and mobile facilities. In the 13 February 2026 postal ballot on Mr. Kamal Kant Kumar's appointment, public non-institution shareholders voted 89.28% against (44,732 of 50,103 votes polled), while promoter votes carried both resolutions with 98.83% overall assent. The Board's Report for FY2025-26 states there is "no relationship among Directors" as on 31 March 2026, while the same report discloses Mrs. Nisha Mehta is sister of Mr. Raj Chopra.
  2. Related-party dealings concentrate benefits within the promoter family Major - The company acquired 52,38,095 equity shares of Raj Chopra & Company Pvt. Ltd. (RCCPL), a related party controlled by the promoter group, for ₹21,99,99,990 (₹42 per share including ₹32 premium) on 8 Nov 2022; RCCPL had FY22 turnover of ₹85.02 crore. Loans from Directors were repayable on demand at 7.50% p.a. interest in FY2025-26 and FY2024-25. Mr. Abheer Ahuja, grandson of CMD Raj Chopra and son of WTD Kavita Ahuja, was appointed to hold office or place of profit as a permanent employee at ₹2,25,000 per month, heading Digital Marketing and overseeing finance, via postal ballot approved 18 Dec 2023 with 99.99% votes in favour. The company states in each annual report from FY2019-20 through FY2025-26 that all related-party transactions were in the ordinary course of business and at arm's length.
  3. Exceptional items and reclassifications repeatedly shape reported profit Major - The company reported exceptional items of Rs. 1.48 crore for estimated loss from flooding at its Bahadurgarh stockyard in September 2025 and Rs. 15.87 lakhs for estimated loss from a fire at its Una, Himachal Pradesh premises in March 2026, both with insurance claims under process. The company presented an incremental impact of Rs. 1.43 crore under "Exceptional Items" for the year ended 31 March 2026 for restructuring of employee compensation effective 1 April 2026 following notification of four Labour Codes on 21 November 2025. Income tax expense for the year ended 31 March 2026 includes prior-period provisions of Rs. 28.02 lakhs, and Rs. 54.16 lakhs for the year ended 31 March 2025. The company made reclassifications to the comparative period's financial statements for the year ended 31 March 2026 to enhance comparability.
  4. Receivables deemed fully recoverable without any expected-credit-loss provision Minor - Competent Automobiles Company Ltd did not provide for expected credit loss on trade receivables under the simplified approach in FY2025-26, citing past trends of complete recoverability. Trade receivables stood at 55.55 crore in FY2021-22, up from 44.58 crore in FY2020-21, and were unsecured and considered good with no expected credit loss provision made based on "past trends of complete recoverability". The company stated in FY2019-20 that its credit risk is "very much on the lower side," with trade receivables largely secured and primarily from banks, finance companies and insurance companies.
  5. A ₹3.43 crore GST dispute remains pending before the Appellate Authority Minor - Claims against the Company not acknowledged as debts in respect of GST matters amounted to ₹3.43 crore as at 31 March 2025, arising from disputes on admissibility of input tax credit and liability determination, pending before the Appellate Authority, with management expecting the position will likely be upheld. The dispute regarding GST payment on account of non-payment by a service provider was settled under Arbitration during FY 2025-26.
  6. Operating cash flow is volatile and cumulatively weak relative to earnings Minor - Cumulative CFO of ₹116 crore was only 0.47x cumulative EBITDA of ₹249 crore over the four-year period through FY2025-26. CFO swung from -₹17.81 crore in FY2023-24 to ₹53.57 crore in FY2024-25 and ₹80.08 crore in FY2025-26, with CFO/PAT of -0.65x, 2.49x and 3.89x respectively. ROCE declined from 9.25% in FY2023-24 to 7.83% in FY2024-25 and 7.67% in FY2025-26.
  7. The group's structure is a single, recently added wholly owned subsidiary Minor - The company had no subsidiary, associate or joint venture company as defined under the Companies Act, 2013 in FY2019-20, FY2020-21 and FY2021-22. On 8 Nov 2022, the company acquired 52,38,095 equity shares of Raj Chopra & Company Pvt. Ltd. (RCCPL), a related party controlled by the promoter group, for INR 21,99,99,990 (INR 42 per share including INR 32 premium). Competent Kashmir Automobiles Private Limited was incorporated on 12 March 2024 as a wholly owned subsidiary, domiciled in India, and is an authorized dealer of Maruti Suzuki for Jammu & Kashmir areas. Form AOC-1 for FY2025-26 lists only one subsidiary (Competent Kashmir Automobiles Pvt Ltd) and states "The Company does not have any Associate Company or Joint Venture.".
  8. Statutory auditor rotation completed on schedule with no adverse actions Clean - M/s Dinesh Mehta & Co., Chartered Accountants (FRN 000220N), was appointed as Statutory Auditors at the 37th AGM held September 20, 2022, for a term of 5 consecutive years, replacing M/s Hitesh Ambani & Associates LLP (FRN 016923N) whose term expired at the conclusion of that AGM. The appointment was approved by shareholders with 4,160,599 votes in favour (99.99%) and 26 votes against (0.01%). CARO clause (xviii) in the Independent Auditor's Report for FY2024-25 and FY2025-26 states no resignation of statutory auditors occurred during the year. M/s P.P. Agarwal & Co. was appointed as Secretarial Auditors for 5 consecutive years from FY2025-26 to FY2029-30, effective from the conclusion of the 40th AGM held September 27, 2025.

What to watch

Bottom line: This is a disclosed and audited record with a clean auditor-rotation history and no pledge on promoter shares. The risk sits in one place: the promoter family, which controls the board, receives recurring remuneration and commission, and sits on both sides of the ₹21,99,99,990 acquisition and director loans. Read the profit line with the exceptional items and reclassifications in mind, and watch whether the pending GST dispute and insurance claims resolve as management expects.