Lagnam Spintex’s record is a study in contrasts: a large, on-time expansion is now generating sharply improved cash flows, yet the company has entrusted its audit to a firm earning barely ₹2 lakh a year while rotating auditors twice in five years. Three other items sit in the open, a recurring technical caveat on depreciation, a jump in excise disputes, and promoter remuneration that routinely needs shareholder waivers, all disclosed, none provided for.
Key findings
- Excise disputes jumped from ₹1.56 lakh to ₹1.44 crore per period across 25 open years
Minor- Sixteen periods from FY2005-06 through FY2020-21 carry disputed excise demands of ₹1,56,000 each, pending before the Commissioner (Appeals), Jaipur. For nine periods from FY2016-17 through FY2024-25 the disputed amount per period rose to ₹1,43,93,000, also pending before the same authority. No provisions have been made for any of these contingent liabilities. - Auditor flags depreciation classification for six years without qualifying opinion
Minor- Every audit report from FY2021 through FY2026 carries an Emphasis of Matter stating the company depreciates plant and machinery as a ‘Continuous Process Plant’ based on a technical expert’s advice, and that no opinion is expressed on this technical matter. The auditor explicitly states the opinion is not qualified in respect of this matter. The accounting policy confirms the straight-line treatment over Schedule II useful life. - Promoter directors seek pay above regulatory ceilings, and 48% of promoter stock is pledged
Minor- D.P. Mangal (Executive Chairman), his sons Anand Mangal (Managing Director) and Shubh Mangal (Executive Director) are the only executive directors on a seven-member board. AGM notices for FY2020-21, FY2021-22, and FY2024-25 seek special resolutions because their individual or aggregate remuneration may exceed the 2.5% or 5% of net profit ceilings under SEBI LODR Regulation 17(6)(e). Promoter shareholding stands at 68.50%, with 48.16% of that holding pledged. - Cash flow turned sharply positive in FY26 as a large expansion came online on time
Clean- The company completed its 41,472-spindle compact cotton yarn expansion at a cost of ₹218 crore and commissioned it on 31 January 2024, two months ahead of schedule and without time or cost overrun. Operating cash flow rose to ₹73.01 crore in FY26, covering reported profit 5.07 times, up from 1.87 times in FY25 and 1.50 times in FY24. ROCE improved to 10.23% in FY26 from 9.60% in FY25 and 7.41% in FY24.
What to watch
- Excise duty disputes. The 25 disputed periods, including nine at ₹1.44 crore each, remain pending before the Commissioner (Appeals), Jaipur, with no scheduled hearing dates disclosed as of the FY2026 reporting period.
- Capital commitments. Contracts remaining to be executed on capital account stood at 43.24 crore as of FY2026, up from nil in FY2025.
Bottom line: This is a disclosed record with a genuine operational turnaround, the expansion is built, cash flow has arrived, and returns are climbing. The six-year depreciation caveat means one accounting judgement has never been independently confirmed, and the promoter remuneration resolutions and 48% promoter pledge together keep governance in the frame. Watch the excise docket for any movement, and read the auditor’s next report for whether the ‘Continuous Process Plant’ treatment finally gets resolved.