Enviro Infra Engineers Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Enviro Infra Engineers' FY2025-26 record carries a clean audit opinion, but that opinion sits alongside a reported cyber fraud, three straight years of negative operating cash flow against rising profits, and a group structure that was rebuilt in a single year. The company's own management concedes its unbilled revenue and working capital cycle remain "bloated."

Key findings

  1. Operating cash flow has been negative for three straight years while profits rose Major - Cumulative operating cash flow was ₹-66 crore against cumulative profit of ₹576 crore (minus ₹71 crore of other income) over seven years, a -0.13x ratio. CFO was ₹-63.09 crore in FY26 against PAT of ₹188 crore, and ₹-46.60 crore in FY25 against PAT of ₹177 crore, while revenue grew from ₹1,066 crore to ₹1,146 crore. Management acknowledged in Q1 FY27 that unbilled revenue "is not improved right now" and "still bloated," and that the working capital cycle "still remains bloated".
  2. Auditors issued clean opinions but reported an ₹11.15 crore cyber fraud Major - S S Kothari Mehta & Co. LLP issued an unqualified opinion on the FY2025-26 standalone financial statements, dated 28 May 2026, and reported two Key Audit Matters. The auditor reported a cyber fraud under Section 143(12) of the Companies Act aggregating ₹11.15 crore, of which ₹2.4 crore was recovered up to 31 March 2026, and filed Form ADT-4 with the Central Government. The Chairman & Whole Time Director and Chairman voluntarily relinquished their remuneration until financial losses from the fraud are fully recovered.
  3. Group structure grew from three dormant SPVs to a seven-subsidiary, three-layer renewable chain Major - During FY2025-26, the subsidiary count grew from three to seven, adding EIE Renewables Private Limited and three step-down WOSs acquired through it, plus two post-year-end step-down acquisitions. Enviro Infra Engineers (Saharanpur) is consolidated as a subsidiary at 48% ownership "by virtue of the control" through Board composition, while Soltrix Energy Solution is treated as a 100% subsidiary despite ERPL holding only 49% upfront, with a call option over the remaining 51%. The Group's BOT contracts are not eliminated in consolidation, on the basis that construction revenue is exchanged with the grantor.
  4. Promoter entities receive escalating financial support Major - Corporate guarantees to subsidiaries grew from ₹258.61 crore in FY2024-25 to ₹362.94 crore in FY2025-26. Shareholder approval is sought under Section 185 for loans/guarantees to Suyog Urja Limited, a step-down subsidiary in which directors Mr. Sanjay Jain and Mr. Manish Jain are interested, up to ₹600 crore in any financial year. The materiality threshold for related party transaction approval is ₹114.56 crore, being 10% of annual consolidated turnover of ₹1,145.60 crore as on March 31, 2026.
  5. Promoter family dominates board and remuneration, with re-appointments initially rejected Major - Mr. Sanjay Jain's re-appointment as Chairman & Whole-Time Director was NOT approved at the 15th AGM held 28 August 2025, but passed via postal ballot on 3 October 2025 with promoter votes excluded and 65.60% of votes polled in favour. His remuneration resolution received only 65.60% in favour with public institutions voting 57.80% against, but was declared passed. Mr. Sanjay Jain and Mr. Manish Jain each received ₹4.80 crore per annum in FY2024-25, a ratio of 419.84:1 to median employee remuneration.
  6. Reported borrowings understate economic obligations Major - Undrawn committed borrowing limits stood at ₹263.62 crore as at 31 March 2026, up from ₹53.88 crore a year earlier. Payables subject to a factoring arrangement are presented as unsecured borrowings, and all term deposits except ₹5.93 Lakh were pledged with banks as margin as at 31 March 2026. Shareholders passed a Special Resolution on 29 August 2025 increasing borrowing limits under Section 180(1)(c) to ₹2,500 crore, superseding the prior authorisation of up to ₹1,000 crore.
  7. Revenue is recognised on percentage-of-completion while cash flow stays negative Major - Revenue is recognised over time per Ind AS 115 based on percentage of completion, which the FY2024-25 auditor flags as a Key Audit Matter involving "significant judgment on estimated total costs, contractual obligations, scope amendments and price escalations". CFO/PAT deteriorated from positive 1.83x in FY23 and 1.20x in FY22 to -0.96x in FY24, -0.26x in FY25 and -0.33x in FY26. Management noted a "slight slowdown in the cash flow receiving from the government clients".
  8. Company seeks approval to redirect IPO proceeds toward two new HAM projects Major - Unutilised IPO proceeds parked in fixed deposits were 58.34 crore including accrued interest as at FY2026 year-end, down from 235.46 crore at FY2025 year-end. Item No. 7 of the FY2025-26 AGM notice seeks approval to deploy ₹44.45 crore towards infusion of funds into two Wholly Owned Subsidiaries for HAM projects, with no specific inorganic acquisition opportunity finalised for the original object. The company had utilised approximately 90% of IPO proceeds as on June 30, 2026.

What to watch

Bottom line: This is an audited record with a clean opinion, but the cash conversion is the story, three years of negative operating cash flow against growing profits, with management's own admission that working capital remains "bloated." The risk character is one of recognised revenue running ahead of cash realisation, compounded by a rapidly expanding group structure and rising related-party support. Watch the AGM votes on 16 September 2026 and whether the cyber fraud recovery completes.