Salasar Techno Engineering Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Salasar Techno Engineering's record shows a clean audit opinion, but the consolidated picture is weaker than the standalone one, with consolidated PAT of ₹13.97 crore versus standalone PAT of ₹40.49 crore in the latest year, and cash conversion has lagged profits for a decade, with cumulative operating cash flow of ₹178 crore equaling 0.24x of cumulative EBITDA of ₹744 crore over the ten-year history through the latest period. The company's borrowing is secured by promoter guarantees and pledges, while reported net debt excludes locked-in margin money.

Key findings

  1. Consolidated results hide ₹26.52 crore of losses in JV/LLP entities outside the standalone books Major - Consolidated PAT was ₹13.97 crore versus standalone PAT of ₹40.49 crore in the latest year, meaning ₹26.52 crore of losses sat in subsidiaries/JVs/associates. Entities not audited by the principal auditor - M/s Salasar REW JV, M/s Salasar Adorus Infra LLP, STEL ME JV, Sikka Salasar JV, Salasar RVNL JV, and M/s EMC Ltd - had total assets of ₹87.15 crore, total revenues of ₹46.81 crore, and a total net loss after tax of ₹26.95 crore for the year ended March 31, 2026.
  2. Promoter family dominates both board and payroll, with executive-director remuneration repeatedly approved at minimum-pay levels despite profit inadequacy Major - Promoter holding fell to 44.50% from 48.92% a year earlier, a decline of 4.42 percentage points, with 40 promoter disposal events totalling ₹119 crore and the latest disposals on 30-Jun-2026. The FY2025-26 AGM notice proposes re-appointment of Mr. Shashank Agarwal, Mr. Shalabh Agarwal and Ms. Tripti Gupta as executive directors for five years from 10-Dec-2026, with special resolutions required because aggregate annual remuneration payable to all promoter executive directors exceeds 5% of annual net profits.
  3. Salasar's reported profits have not converted into operating cash flow across the cycle Major - Cumulative operating cash flow of ₹178 crore equals 0.24x of cumulative EBITDA of ₹744 crore over the ten-year history through the latest period. In FY2025-26, the company reported CFO of ₹161 crore against PAT of ₹17.63 crore, a CFO/PAT ratio of 9.13x, while ROCE declined from 14.45% in FY2023-24 to 7.68% in FY2025-26.
  4. Revenue recognition relies on management's subjective cost-to-complete estimates on long-cycle EPC contracts Major - The auditor has flagged contract revenue and margin recognition on EPC contracts as a Key Audit Matter in every annual report from FY2019-20 through FY2021-22, citing the input method's reliance on management estimates of cost-to-complete, contract variations, claims, and liquidated damages as inherently subjective. Standalone customer concentration rose from three customers representing 40.22% of revenue in FY2020-21 to five customers representing 51.03% of revenue in FY2024-25, before easing to 39.74% in FY2025-26.
  5. Salasar's entire borrowing structure rests on promoter personal guarantees and pledges of operating assets Major - Working capital facilities are secured by hypothecation of raw material, WIP, finished goods and book debts, pledge of cash margin money in the form of FDRs, and exclusive charges over fixed assets, with personal guarantees of Mr. Shashank Agarwal, Mrs. Anshu Agarwal and Mr. Shalabh Agarwal. The company's capital management policy defines net debt as interest-bearing loans and borrowings less cash and cash equivalents and bank balances other than cash and cash equivalents, thereby excluding pledged margin-money FDRs from the net-debt calculation.
  6. A ₹118.40 crore EMC Ltd bank guarantee and a ₹4.03 crore GST debit dispute dominate contingent liabilities Minor - Consolidated contingent liabilities include a bank guarantee of 118.4 crore (₹118.40 crore) in FY2026 belonging to EMC Ltd, up from ₹103.05 crore in FY2025. In EMC Limited, a final liquidator order dated 22-Nov-2024 waived all GST demands, but the GST department debited ₹4.03 crore, against which a writ petition was filed before the Hon'ble High Court at Madurai.
  7. SEBI's August 2025 comments on the Hill View amalgamation require disclosure of all enforcement actions Minor - SEBI, vide letter dated August 05, 2025, issued comments on the draft scheme of amalgamation of Hill View Infrabuild Limited with Salasar Techno Engineering Limited, requiring disclosure of all details of ongoing adjudication and recovery proceedings, prosecution initiated, and all other enforcement action taken against the Company, its promoters, and directors. SEBI imposed a penalty of ₹2,00,000 on the company for failure to comply with disclosure requirements under Regulation 29(2) and 29(3) of SEBI SAST Regulation 2011, pertaining to financial year 2011-12.
  8. Related-party dealings are recurring, auditor-flagged as a key audit matter every year from FY2019-20 through FY2021-22 Minor - The independent auditor identified related-party transactions as Key Audit Matter 2 in the standalone and consolidated financial statements for FY2019-20, FY2020-21, and FY2021-22, citing risks regarding completeness of disclosures, recoverability, compliance, and arm's-length assessment. On 30 December 2024, the Board approved a proposed amalgamation of Hill View Infrabuild Limited with Salasar Techno Engineering Limited, stated as a related-party transaction proposed at arm's length.

What to watch

Bottom line: This is a disclosed and audited record with real assets and revenue, but the gap between standalone and consolidated results, the decline in promoter holding, and the weak cumulative cash conversion warrant attention. The risk sits in the losses at unconsolidated JV/LLP entities, the reliance on promoter guarantees for borrowing, and the pending regulatory and legal outcomes. Watch whether the EMC amalgamation is booked, how the Hill View scheme proceeds, and whether the promoter disposal trend continues.