Dynemic Products Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Dynemic Products' statutory record is clean on its face, seven years of unqualified audit opinions and no material regulator orders impacting going concern were reported. But the earnings quality underneath is weaker than the opinions suggest: ₹256 crore of project costs were capitalised just as the Dahej unit began losing money, tax expense reflects a low average effective tax rate of 15.3% versus a statutory rate of 25.2%, and reported borrowings exclude discounted receivables that remain on the balance sheet.

Key findings

  1. ₹256 crore of project costs were capitalised as Dahej losses began Major - During FY2021-22, capital work-in-progress of 256.16 crore at Unit-3, Dahej was transferred to assets, with depreciation claimed and interest and production expenses charged to profit from July or October 2021. The unit generated losses of 18.26 crore that year, which the company said had a major impact on all key financial ratios. Over the ten years through FY2026, cumulative operating cash flow of ₹238 crore covered only 0.69x of cumulative EBITDA of ₹345 crore.
  2. Reported borrowings understate the true financing burden Major - Dynemic discounted trade receivables for cash but retained late payment and credit risk, continuing to recognise the receivables in full while presenting the amount payable as secured borrowings, disclosed in every year from FY2019-20 through FY2025-26. All secured borrowings are backed by personal guarantees of directors Bhagwandas K Patel, Ramesh B Patel, and Dixit B Patel. As at 31.03.2025, contractual borrowings due within one year were 88.24 crore.
  3. Revenue recognition is a recurring audit focus while receivables outpace sales Major - The auditor flagged Ind AS 115 revenue recognition as a Key Audit Matter in standalone statements for five consecutive years and in consolidated statements for four. Standalone trade receivables neither past due nor impaired rose from ₹31.89 crore at 31.03.2020 to ₹74.71 crore at 31.03.2026, while revenue rose from ₹201.24 crore in FY2020-21 to ₹379 crore in FY2025-26. In FY2021-22, the auditor quantified debtor-statement differences with banks of ₹(3.03) lakhs, ₹(175.73) lakhs, and ₹(81.55) lakhs across three quarters.
  4. Promoter family dominates board and pay, with insider-trading violations Major - Three executive directors, Bhagwandas K Patel, Rameshbhai B Patel, and Dixitbhai B Patel, are re-appointed on salaries of ₹7.95 lakh, ₹7.62 lakh, and ₹6.03 lakh per month respectively, with commission. Median employee remuneration was ₹2.83 lakhs in FY2025-26. Secretarial audits recorded two insider-trading window violations in FY2022-23 and four in FY2021-22 by promoters, an employee, and an independent director; warning letters were issued and penalties waived in all cases. An independent director vacancy was left unfilled after Ms. Rashmi Aahuja resigned on 12.06.2025 citing pre-occupation.
  5. Minor regulatory failures recur, but no material orders or penalties Minor - The Income Tax Department searched Dynemic's premises from 12.11.2025 to 16.11.2025, postponing a Board meeting; results were adopted on 20.11.2025. Fines of ₹20,000 plus GST were paid to BSE and NSE for delaying approval of September 2025 quarterly results, and a further ₹23,600 was paid to each exchange on 17.12.2025 for the same non-compliance. The FY2024-25 Annual Secretarial Compliance Report was filed one day late, and 13,766 IEPF-due shares were transferred beyond the 30-day timeline. No significant or material regulator orders impacting going concern were reported in FY2025-26.
  6. Seven years of clean audit opinions with two recurring mechanical exceptions Minor - Unqualified opinions were issued on standalone and consolidated statements for every year from FY2019-20 through FY2025-26. The audit trail feature operated throughout FY2025-26 with no tampering, though in FY2023-24 it was enabled only in phases between November and December 2023. CARO clause ii(b) noted differences between bank-filed quarterly statements and books in every year from FY2021-22 through FY2025-26.
  7. Operating cash flow consistently exceeds reported profit Clean - CFO covered PAT by 1.73x in FY2026, 2.03x in FY2025, 8.36x in FY2024, and 2.78x in FY2022. Free cash flow was ₹30.64 crore in FY2026, ₹23.57 crore in FY2025, and ₹27.49 crore in FY2024. Capital raised through a FY2022-23 rights issue of ₹16.1 crore and a FY2023-24 preferential issue of ₹10.8 crore was fully deployed to working capital with no unutilised funds.

What to watch

Bottom line: This is an audited record with genuine cash generation, operating cash flow has beaten reported profit in most years, and capital raises were fully deployed as disclosed. The risk is in the accounting choices: capitalised project costs flattered profit as Dahej lost money, the average effective tax rate of 15.3% is well below the statutory rate of 25.2% over four years, and discounted receivables hide part of the true borrowing. Watch the Income Tax search outcome and the term loan repayment schedule.