Stallion India Fluorochemicals Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Stallion India Fluorochemicals has a clean statutory audit record for two straight years, but the cash story is weaker than the profit line: cumulative operating cash flow is negative ₹51 crore against ₹132 crore of profit over six years, and the company has repeatedly turned to fresh equity to fund its plant. A monitoring agency has also flagged material deviations in how IPO proceeds were used, and a promoter family holds the key board and management roles.

Key findings

  1. Cash generation has not backed reported profit Major - Cumulative CFO was ₹-51 crore against cumulative PAT of ₹132 crore over FY21-FY26, a CFO/(PAT−other income) ratio of -0.41x. CFO was ₹39.36 crore against PAT of ₹43.84 crore in FY26, but negative in FY25 and FY24 at ₹-13.43 crore and ₹-73.45 crore respectively. The company completed a ₹160.73 crore IPO listed in January 2025, and shareholders approved a variation in IPO proceeds use on 3 June 2026.
  2. IPO proceeds use drew repeated monitoring-agency flags until June 2026 Major - CARE Ratings reported excess issue-expense utilization of ₹3.99 crore for the December 2025 quarter and excess working-capital utilization of ₹3.71 crore for Q1FY26, noting commingling of funds. A special resolution dated 3 June 2026 regularized the deviations. Stock-exchange fines for a board-age rule violation were waived after company clarifications.
  3. Promoter family controls the board and CEO role; an independent director moved into the CFO seat Major - Mr. Shazad Sheriar Rustomji is Chairman, CEO & Managing Director, related to two fellow directors. Mr. Virenderkumar Mehta resigned as Non-Executive Independent Director and was appointed CFO, both effective 8 April 2025. Members approved 15,86,505 stock options at ₹10 per share to a 20-year employee director, representing 2% of issued capital.
  4. A related-party slump sale was booked at carrying values; a one-time provision hit FY25 profit Major - Stallion India acquired Stallion Enterprise, owned by Mr. Shazad Rustomji, effective 30 September 2023, for ₹3,246.86 lacs paid via a preferential share issue. The deal was accounted for as a common-control combination at carrying values. FY25 PAT excludes a one-time provision of ₹10.71 crore; adjusted PAT was ₹43.04 crore.
  5. Two clean audits, but the audit-trail exception and secretarial compliance delays repeat Major - Mittal & Associates issued unqualified opinions for FY2025-26 and FY2024-25 with no Key Audit Matters. In both years, the audit trail was not enabled for direct database-level changes. The secretarial auditor flagged delays in uploading financial results and in obtaining member approval for a director's regularization in FY2025-26.
  6. Revenue recognition is point-in-time, but receivables and cash conversion show strain Minor - Revenue is recognised upon receipt of goods by the customer. Receivable days were 65.71 in FY26, down from 102 in FY25 and 111 in FY24. Cumulative CFO to PAT minus other income was -0.41x over six years.
  7. A Chinese supplier dispute was settled; remaining contingencies are limited Minor - Stallion India settled its dispute with Zhejiang Sanmei Chemical by paying the entire claim of USD 1,251,290. The claim had been escalated via an IBC demand notice dated 2 December 2021. Remaining contingencies are income tax demands under appeal and a ₹2.25 crore bank guarantee secured by a promoter's deposit.
  8. Related-party dealings include a director loan and a promoter-owned concern transfer Minor - A director loan is unsecured, interest-free, and payable on demand. Inventories were transferred to Stallion Enterprise, a promoter-owned concern, effective 30 September 2023. The rights-issue letter of offer disclosed past related-party transactions and that more favourable terms could not be assured.

What to watch

Bottom line: This is a disclosed record with clean audit opinions, but the cash conversion is the central weakness, with cumulative operating cash flow negative over six years despite steady reported profit. The risk character is one of governance concentration and repeated regulatory actions, so watch the September 2026 monitoring report and the AGM votes.