R S Software (India) Ltd Forensic Report - SOIC x StockScans Report

as of Jul 2026

R S Software's record is clean on its face, eight years of unqualified audit opinions and a routine auditor rotation, but the numbers tell a different story. Revenue halved to ₹25 crore in FY26 while receivables stretched to 123 days, the USA business swung from a ₹12.75 crore profit to a ₹15.42 crore loss, and the company has relied on a single unnamed customer for at least eight years without disclosing unsatisfied performance obligations.

Key findings

  1. Revenue halved while receivables quadrupled, and a single unnamed customer has dominated for eight years Major - Revenue fell 56% from ₹57.32 crore in FY25 to ₹25.14 crore in FY26, while receivable days rose from 30 to 123. The USA segment swung from a profit before tax and interest of ₹12.75 crore to a loss of ₹15.42 crore in the same period. One customer has represented more than 10% of revenue every year from FY2018-19 through FY2025-26, yet the company does not disclose the transaction price allocated to unsatisfied performance obligations, stating contracts are T&M-based with no predetermined values.
  2. Operating cash flow has swung between deep deficits and modest surpluses, and the company paid a dividend amid losses Major - Consolidated CFO was negative ₹6.62 crore in FY26 against a PAT loss of ₹28.51 crore, yielding a CFO/PAT ratio of 0.23x, while FY25 CFO was positive ₹8.15 crore against PAT of ₹9.64 crore. Consolidated ROCE collapsed to -62.48% in FY26 from 16.81% in FY25 and 36.93% in FY24. The company paid a dividend of ₹64.27 lacs during FY25, even as FY26 reported no dividend and interest coverage stood at -32.55x with lease liabilities of ₹15.00 crore against cash of ₹5.79 crore.
  3. The company repeatedly granted unsecured, interest-free loans to its subsidiary without repayment schedules Major - In FY2021-22, FY2022-23, and FY2024-25, the company granted unsecured loans to one subsidiary without stipulating any schedule of repayment of principal and interest. In FY2022-23, the auditor stated that the terms of the ₹1,97,04,629.16 loan were prima facie prejudicial to the company's interest. As of 31 March 2026, the company reported a borrowing of ₹552.89 lac from its subsidiary Paypermint Private Limited, while the subsidiary's loan to the holding company was exactly ₹552.89 lac.
  4. Management claimed zero debt while lease liabilities reached ₹15.00 crore and a PPP loan was received Major - Management stated the company had zero debt for the past 14 years in the FY22 MD&A, and was debt-free for 12 years in the FY21 MD&A. Lease liabilities increased from ₹54.77 lac in FY25 to ₹1,413.61 lac in FY26, with a further short-term lease liability of ₹86.45 lac, making the total lease liability ₹15.00 crore. The company also received a US government PPP loan during FY21 at 1% p.a. and applied for forgiveness of $344K, while total financial indebtedness was reported as ₹0.00 crore as of 22 January 2025.
  5. Promoter CEO remuneration is guaranteed in USD even in loss years, and the board operated below the statutory minimum for seven months Major - Mr. Rajnit Rai Jain's remuneration as CEO is fixed at USD 200,000 per annum plus business expense reimbursement up to USD 25,000 per quarter, payable even in case of absence or inadequacy of profits. The company reported a consolidated PAT loss of ₹28.51 crore in FY26 and ₹8.68 crore in FY23, yet his package remained unchanged. Two long-tenure independent directors were reclassified as non-independent upon completing their 10-year terms on 1 April 2024 and continued on the board, and the board operated without the statutory minimum of six directors from 17 March 2023 to 21 October 2023.
  6. Recurring SEBI LODR compliance failures have drawn exchange fines across multiple years, with a ₹5.60 lakh penalty imposed in FY26 after a waiver was denied Major - In FY2025-26, NSE levied a fine of ₹5,60,000 after rejecting a waiver application for non-compliance with Regulation 17(1) of SEBI LODR for the quarters ended 30 September 2023 and 31 December 2023. The Secretarial Auditor also reported a delayed intimation for the board meeting held on 21 January 2026. In FY2023-24, NSE imposed fines of ₹82,600 and ₹5,42,800 for similar board-composition non-compliance, and in FY2021-22 the company paid ₹10,38,400 to NSE.
  7. Multi-year disputed tax demands of ₹8.84 crore remain unresolved, with a new ₹1.1 crore GST demand added in FY26 Minor - A service tax demand of ₹3.99 crore for FY2007-12 has been contested since at least FY2019, with CESTAT quashing part of the demand and remanding the rest for verification. A California Franchisee Tax Board demand of $494,563 (₹3.75 crore) for tax years 2011 and 2012 was provisioned in FY22, and the company continues making installment payments while seeking further relief. A GST demand of ₹1.1 crore for FY2018-19 was challenged and the company made a provision to file a further appeal to GSTAT in FY26.

What to watch

Bottom line: This is a disclosed and audited record with a clean audit trail on paper, but the substance is strained: revenue has halved, the USA business is deeply loss-making, and a single unnamed customer has anchored the top line for eight years without transparency on unfulfilled obligations. The cash cycle is broken, the board has operated below legal minimums, and related-party loans now flow in both directions between parent and subsidiary. Watch whether the lease liabilities can be serviced from operations, whether the US tax demand is resolved, and whether the CEO's re-appointment passes a shareholder vote.