Murudeshwar Ceramics' record carries seven straight unqualified audit opinions, but the clean opinions sit alongside a recurring, self-admitted gap between what the company tells its banks and what its books show. The bigger weight sits in related-party exposure: the bulk of revenue flows through a promoter-group company, and the company has provided guarantees jointly with other guarantors on behalf of that group company, aggregating to ₹450.00 crore under Section 186 of the Companies Act. A single associate, RNS Power Limited, has been consolidated from unaudited, management-furnished numbers for two years running.
Key findings
- RNSIL received ₹64.50 crore in service receipts from Murudeshwar Ceramics in FY2022-23
Major- RNS Infrastructure Limited (RNSIL) received ₹64.50 crore in service receipts from Murudeshwar Ceramics in FY2022-23. The proposed related-party transaction value of ₹100.00 crore for FY2023-24 represented 58% of the company's immediately preceding annual consolidated turnover. In FY2024-25, the company provided an additional guarantee of ₹100.00 crore to lenders on behalf of RNSIL, jointly with other guarantors aggregating to ₹450.00 crore under Section 186 of the Companies Act. - Working-capital borrowing rests on collateral the company admits is overstated in its books
Major- The company's quarterly stock statements filed with banks are not in agreement with its books, because receivables and inventories outstanding for more than six months and receivables from related parties are excluded from the Drawing Power calculation. This same variance was reported in FY2024-25, FY2023-24, and FY2021-22. All secured and unsecured loans other than public deposits carry personal guarantees of two Promoter Directors, and shareholders have pre-approved ₹500.00 crore limits for related-party loans, guarantees, and security under both Section 185 and Section 186. - Seven clean audit opinions sit beside a recurring bank-vs-books mismatch and an unaudited associate
Major- K.G. Rao & Co. issued an unqualified opinion on the standalone financial statements for every year from FY2019-20 through FY2025-26. Yet CARO clause 3(ii)(b) reported in every year from FY2021-22 through FY2025-26 that quarterly statements filed with banks for working capital limits exceeding ₹5 crore were not in agreement with the books. The consolidated audit report for FY2025-26 includes the associate RNS Power Limited's financial information that is unaudited and furnished by management. - The sole associate has been consolidated from unaudited numbers for two years, with nil assets and a growing loss
Major- RNS Power Limited is the company's only associate, and reported total assets of Nil, total revenue of ₹0.00, and a net loss after tax of ₹(46.15) for the year ended 31 March 2026. The consolidated financial statements for FY2025-26 include this unaudited, management-furnished information. For FY2024-25, the group's share of net loss from RNS Power Limited was ₹8.49 lakhs, from statements audited by other auditors that year. - A long-standing ₹350 crore guarantee for a group company sits alongside multi-year disputed tax dues
Major- The company provided a guarantee jointly with other guarantors to the extent of ₹350.00 crore in favour of lenders on behalf of RNS Infrastructure Limited, a group company, as per member-approved limit. This guarantee was given for a Covid Loan, guaranteeing repayment of a Credit Facility with Canara Bank as lead banker. Income-tax disputes were pending for AY 2007-08 to 2015-16 before the Appellate Tribunal and for AY 2006-07 before CIT Appeals. - Reported profits are shaped by recurring deferred-tax restatements and useful-life choices that diverge from Schedule II
Minor- The company restated its deferred tax calculation from Minimum Alternate Tax (MAT) rates to normal income tax rates per Ind AS 12 in FY2019-20, FY2020-21, FY2021-22, and FY2022-23. It depreciates Plant & Machinery over 25-30 years versus the 20 years prescribed by Schedule II, and Building/Factory over 50 years versus 60 years. Profit decreased 21% in FY2024 to ₹4.97 crore from ₹6.43 crore due to deferred tax provisions. - Product sales grow while services revenue stagnates, and no expected credit loss is ever booked
Minor- Sale of products increased 7.33% to ₹148.23 crore in FY2026 from ₹138.1 crore in FY2025, while sale of services decreased 11.72% to ₹56.77 crore from ₹64.31 crore. Receivables days swung from 32.19 in FY2024 to 72.99 in FY2025 and 91.45 in FY2026. The company stated "no cases of historical defaults, hence no provision for expected credit loss considered necessary" in FY2025 standalone financial statements. - A family-controlled board repeatedly secured near-unanimous approval for promoter pay and warrant conversions
Minor- Satish Rama Shetty, Sunil Rama Shetty and Naveen Rama Shetty are brothers, and Karan Satish Shetty is son of Satish Rama Shetty. Satish Rama Shetty's remuneration as Chairman & Managing Director was approved at ₹10,00,000 per month basic salary plus benefits, payable as minimum remuneration "irrespective of whether there is adequate profit available in any year or not" for five years from June 26, 2025. The Board allotted 2,850,000 equity shares on February 14, 2024 by conversion of equal number of warrants to promoters' group at ₹47.00 per share. - Auditor history shows one resignation in FY2019-20, followed by long-term reappointments with no adverse actions since
Clean- M/s. K.A. Raghupathy & Co., the previous statutory auditor, resigned after completing the statutory audit for FY2019-20, citing downsizing of their firm as the reason. M/s. K.G. Rao & Co. was appointed for five years from September 28, 2019, and reappointed for a second consecutive five-year term at the 41st AGM on 21 Sep 2024 with 99.996% votes in favour. CARO clause 3(xviii) in the FY2025-26 standalone audit report states there was no resignation of statutory auditors during the year.
What to watch
- NSE/BSE waiver applications. Outcome of the company's waiver applications for Regulation 17(1A) fines was still under process as of the FY2024-25 reporting period.
- Supreme Court appeal. Final outcome of Civil Appeal No. 1305/2024, which the company cited as the basis for paying penalties under protest.
- Associate audit completion. Completion of the Section 143 audit and CARO report for RNS Power Limited, whose FY2025-26 financial information was unaudited as at the 29.05.2026 audit report date.
- GST reconciliation. Resolution of the ₹4.57 crore GST payable subject to reconciliation flagged in the FY2025-26 audit reports.
- Next AGM approval. Approval of material related party transactions with RNS Infrastructure Limited for FY2027-28, following the ₹100.00 crore limit for FY2026-27 approved at the AGM held 25th August 2025.
Bottom line: This is a disclosed and audited record with a clean auditor history and no promoter pledge. The risk sits in the related-party web: revenue flows through a promoter-group company, the company has provided guarantees jointly with other guarantors on behalf of that company aggregating to ₹450 crore, and the sole associate is consolidated from unaudited numbers. The recurring bank-vs-books mismatch means the borrowing base is not what the books say it is. Watch whether the associate gets audited, whether the GST reconciliation resolves, and what the next AGM approves for RNSIL.