Huhtamaki India Ltd Forensic Report - SOIC x StockScans Report

as of Jul 2026

Huhtamaki India’s record is largely clean on audit opinions and internal controls, but three things cut through: a depreciation-method error that inflated profits for two years before an ₹8.8 crore catch-up charge, audit-trail gaps that have persisted across two reporting cycles, and a revolving door in the executive suite that has left the CFO chair empty since December 2025.

Key findings

  1. A depreciation-method error inflated profits for two years before an ₹8.8 crore catch-up charge Major - Management disclosed in the Q4 FY26 call that an ₹8.8 crore charge booked in Q1 FY26 relates to “lower depreciation charge in the prior 2 years” because “there has been an error, which led to the depreciation calculation on WDV instead of the SLM method.” The correction has been made in both the profit-and-loss account and the balance sheet.
  2. Audit-trail and server-backup exceptions have persisted from FY2024 onward Major - The FY2025 auditor could not comment on whether backups of payroll and purchase records were kept on servers in India, because third-party service providers did not supply evidence. The backup of the audit trail for the general-ledger software was not maintained daily from 1 January 2025 to 24 February 2025, and for two third-party systems the auditor could not confirm the audit trail was enabled for stretches of the year due to insufficient reporting or absent reports. In FY2024, the audit trail was not enabled at the application and database layer for direct data changes in the cost-centre master from 1 January 2024 to 25 July 2024, and the backup of the audit trail was not maintained on a daily basis for the financial year ended 31 December 2024.
  3. Three managing directors and two CFOs have departed in five years, and the CFO position remains vacant Major - Mr. Sudip Mall resigned as Managing Director on 30 November 2021 and Mr. Ranjeev Lodha resigned as Executive Director & CFO on 30 September 2021; shareholders later ratified excess remuneration paid to both. Mr. Dhananjay Salunkhe was appointed Managing Director from 12 August 2022 and his re-appointment was approved on 8 May 2025, yet he resigned on 15 January 2026 before the new term began. Mr. Jagdish Agarwal was appointed Whole-time Director & CFO from 26 May 2022 and his re-appointment was approved on 8 May 2025, yet he resigned effective 1 December 2025. The company reversed ₹2.85 crore of share-based payment accruals in FY2025 because of these resignations. The CFO position has been vacant since 1 December 2025.
  4. Reported gross debt fell sharply, but the company carries parent-guaranteed bank lines and a related-party ECB extended to 2027 Minor - Gross debt declined from ₹366.15 crore at 31 December 2022 to ₹101.47 crore at 31 December 2025. Huhtamaki Oyj has guaranteed bank facilities of ₹277.65 crore across three lenders. A ₹100 crore ECB from a fellow subsidiary had its due date pushed from 9 February 2026 to 10 June 2027, carrying interest at 6.5% per annum. Undrawn bank facilities stood at ₹550.5 crore at 31 December 2025.
  5. Revenue recognition timing is a persistent Key Audit Matter across every annual report from FY2019 through FY2026 Minor - The independent auditor has flagged the timing of revenue recognition as a Key Audit Matter, an area needing the most judgement, in every annual report from FY2018-19 through FY2025-26, citing the risk that revenue could be recognised at a time different from the transfer of control. Customer advances fell from ₹9.18 crore at 31 December 2021 to ₹2.82 crore at 31 December 2025.
  6. The company paid a SEBI penalty for capital market non-compliance Minor - SEBI imposed a penalty of ₹5,00,000 on 18 June 2018 for two shareholder complaints; the penalty was paid the next day. In FY2024-25 and FY2025-26, the company received orders from Customs, DGFT, and GST departments imposing penalties for non-compliance, which were paid, with certain matters under appeal or pending adjudication.
  7. Audit opinions are unqualified across all years except FY2021, which was qualified for excess managerial remuneration Clean - The statutory auditor issued an unqualified opinion for FY2025, FY2024, FY2023, FY2022, and FY2020. The FY2021 qualification arose because managerial remuneration exceeded statutory limits by ₹1.62 crore, pending shareholder approval that was subsequently obtained. The internal financial controls opinion has been unqualified every year from FY2020 through FY2025.

What to watch

Bottom line: This is a disclosed and largely cleanly audited record with falling gross debt and cumulative cash flow that covers reported profit. The character of the risk is operational discipline: a depreciation error that sat in the books for two years, audit-trail gaps that a third-party-dependent control environment has not closed, and executive turnover that has left the finance function without a permanent head. Watch whether the new CFO appointment brings stability to the control narrative, and whether the tax and EPCG matters stay contained.