Rama Telecom's record carries a clear tension: five straight clean audit opinions sit alongside an operating cash flow that has been negative in cumulative terms for five years, and an auditor who has repeatedly flagged an unoperated audit trail and disputed statutory dues that have nearly doubled. The company's reported profit is real on paper, but the cash to back it has not appeared, and the audit trail that would verify the numbers has not been switched on.
Key findings
- Reported profits are not converting into operating cash
Major- Cumulative CFO over FY2022-FY2026 was ₹-15 crore against cumulative PAT of ₹13 crore, a CFO/(PAT−other income) ratio of -1.24x. In FY2025-26, net cash from operating activities was ₹-15.55 crore against PAT of ₹2.91 crore, a CFO/PAT ratio of -5.34x, versus FY2025 CFO of ₹0.12 crore against PAT of ₹5.53 crore. Cash and cash equivalents rose from ₹1.43 crore to ₹8.7 crore during FY2025-26, partly attributable to deployment of equity issue proceeds including fixed deposits pending utilisation. - Auditor issues clean opinions while flagging an unoperated audit trail and disputed dues
Major- Auditor Agrawal Uma Shankar & Co issued unqualified opinions for FY2022-23 through FY2025-26, with no Key Audit Matters communicated in FY2025-26. For both FY2025-26 and FY2024-25, the auditor reported the audit-trail (edit-log) facility was NOT enabled at database level to log direct data changes and was NOT operated throughout the year. Disputed statutory dues not deposited grew from ₹1.74 crore as of FY2024-25 to approximately ₹3.32 crore as of FY2025-26, including Income Tax TDS demand ₹18,00,995.05, Income Tax demand ₹15,12,822, and GST demand ₹13,367,780. - Revenue growth accelerated while cash collection collapsed
Major- Revenue from operations rose to ₹50.11cr in FY26 from ₹41.76cr in FY25, while operating margin fell to 7.56% in FY26 from 17.69% in FY25. Cash flow from operations turned sharply negative at ₹-15.55cr in FY26, versus ₹0.12cr in FY25. Receivables days rose to 90.08 in FY25 from 82.05 in FY24, with no FY26 figure reported. The MD&A risk section flags "export concentration risk (large share of revenue from international customers)" as a key risk. - Reported profits are booked under non-Ind AS SME rules
Major- Rama Telecom prepares its FY2025-26 financial statements under non-Ind AS standards, being exempt as an SME-listed company under Rule 4(1) of the Companies (Ind AS) Rules, 2015. Reported PAT rose from ₹1.01cr in FY22 to ₹2.91cr in FY26, while CFO swung from +₹1.27cr in FY22 to -₹15.55cr in FY26. No Scheme of Arrangements was approved and the company did not revalue Property, Plant and Equipment during FY2025-26. - Auditor changed twice in two years
Major- M/s Deepak Agarwal & Associates resigned as statutory auditor, creating a casual vacancy filled by the Board on 1 April 2024 with the appointment of M/s Agrawal Uma Shankar & Co. The replacement was appointed at the 20th AGM held 30 September 2024 for a five-year term running through the 25th AGM. The FY2024-25 Annual Report's AGM notice records the resignation, with the resigning auditor's name not legible in the filing. - Company granted loans to two related parties under Section 186
Minor- In FY2025-26, loans were granted to two related parties under Section 186, with particulars disclosed, whereas in FY2024-25 the Board's Report stated "No loans, investments or guarantees under Section 186 during the year". The FY2025-26 statements state that "Loans/advances in nature of loans granted to promoters, directors, KMPs and related parties are repayable on demand". On 9th March 2026, the Board approved RPT limits for FY 2026-27 within omnibus approval. - Reported borrowings exclude a property loan whose servicing bank changed
Minor- A property loan outstanding balance was transferred from HDFC Bank to ICICI Bank during FY2025-26, with the transfer noted in the standalone financial statements. Borrowings from banks/FIs are secured on current assets, and quarterly returns filed with banks are in agreement with books of accounts as of FY2025-26. - Board composition and leadership roles churned repeatedly
Minor- Chandan Ambly resigned as Independent Director effective 10th October 2025, and Vivek Dhuderia was appointed effective 13th November 2025. Nidhi Sharma resigned as Company Secretary effective 1st May 2026, and Puja Lakhotia was appointed effective 29th May 2026. Sujay Das was appointed as Chief Financial Officer with effect from March 2025.
What to watch
- Audit-trail remediation. Watch whether the Rule 11(g) edit-log deficiency is remediated or repeated in the FY2026-27 audit report, and whether disputed statutory dues (₹3.32 crore as of FY2025-26) are resolved or grow further.
- Cash flow recovery. Whether CFO recovers from the ₹-15.55 crore FY2026 outflow toward reported PAT, and whether cash balances continue to be supported by equity proceeds rather than operating cash generation.
- Working-capital verification. Whether the auditor obtains and verifies the quarterly returns filed with banks for working capital limits, which were not made available for FY2025-26.
- Related party disclosures. Actual related party transactions against the omnibus RPT limits approved on 9th March 2026.
- Auditor term end. The 25th AGM, scheduled end of M/s Agrawal Uma Shankar & Co.'s five-year statutory audit term, per appointment at the 20th AGM held 30 September 2024.
Bottom line: This is a disclosed and audited record with a clean opinion streak, but the substance of the numbers is weak: profits have not converted into cash for five years, the audit trail that would verify the books has been off, and disputed statutory dues are growing. The risk sits in the gap between reported profit and operating cash, and in the audit trail that has not been operated. Read the cash flow statement first, and watch whether the FY2026-27 audit report shows the edit-log switched on and the dues resolved.