Trom Industries' record over FY2021-FY2026 shows a persistent gap between reported profit and cash: cumulative operating cash flow was negative ₹29 crore against cumulative profit of ₹18 crore. The company received an unqualified FY2026 audit opinion, while related-party transaction limits are being doubled and borrowings have shifted sharply toward short-term, collateral-heavy facilities.
Key findings
- Operating cash flow has been negative in four of the last six years
Major- Cumulative operating cash flow was negative ₹29 crore against cumulative PAT of ₹18 crore and other income of ₹1 crore over FY2021-FY2026, a CFO/(PAT−other income) ratio of -1.73x. CFO was negative in FY2026 at ₹-4.44 crore, FY2025 at ₹-18.20 crore, FY2024 at ₹-6.07 crore, and FY2023 at ₹-2.27 crore, while only FY2021 and FY2022 were positive. No dividend was recommended for FY2025-26, and the previous year's dividend was also NIL. - Revenue growth is decoupled from cash collection
Major- Revenue grew from ₹24.01 crore in FY23 to ₹54.35 crore in FY24, ₹93.32 crore in FY25, and ₹123 crore in FY26, while operating cash flow was negative in each of those years. Customer advances received jumped from 1.61 crore as at 31 March 2024 to 7.45 crore as at 31 March 2025, a 4.6x increase. Management attributes H1 FY26 revenue decline to timing, stating "projects executed but billing deferred until after meter installation, with invoices raised only post-completion". - Unqualified FY2026 audit opinion despite the cash-profit gap
Major- Statutory auditor Milind Niyati & Co. LLP issued an unqualified opinion on the FY2026 standalone financial statements, dated May 27, 2026. CARO clause XIX for FY2025-26 states nothing came to the auditor's attention to believe any material uncertainty exists that the company cannot meet liabilities falling due within one year. The Secretarial Audit Report for FY2025-26 noted compliance subject to "filing of certain Compliances of Listing Obligations and Disclosure Requirements) Regulations, 2015 beyond due date". - Company seeks to double related-party transaction limits
Major- The FY2025-26 AGM notice seeks approval for material related party transactions with M/s. Aditya Engineering and M/s. Trom Industries, each up to ₹10 Crores, because management anticipates FY 2026-27 transactions may exceed the materiality threshold of ₹12.34 Crore. For FY ended 31/03/2026, disclosed transactions with Aditya Engineering show approved purchase of goods/services of ₹74.62 lakh but only ₹10.93 lakh paid. Trade receivables from Aditya Engineering grew from ₹4.50 lakh to ₹29.20 lakh between 31 March 2024 and 31 March 2025. - Borrowings swung from long-term to short-term, secured by company FDRs
Major- Short-term borrowings rose from 2.16 crore as at 31 March 2024 to 14.71 crore as at 31 March 2025, while long-term borrowings fell from 3.57 crore to nil. The Bank of Baroda overdraft facility is sanctioned at ₹25.00 crore with a 12-month tenure, collaterally secured by FDRs aggregating ₹18.00 crore and backed by personal guarantees of two directors. Trade payables rose from 7.46 crore to 10.69 crore over the same period. - Auditor changed mid-tenure with no stated reason
Major- The CARO report for FY2022-23 states "statutory auditor resigned during the year; outgoing auditor raised no concerns or objections," with no reason disclosed. M/s. Milind Nyati & Co. was appointed for 4 financial years from the 5th AGM, "on such remuneration as may be decided by the any of Directors in consultation with the Statutory Auditor". The secretarial auditor changed from M/s. Shilvi Patel & Associates (as of 5 Sep 2024) to M/s. Gaurav Bachani & Associates (as of 22 Aug 2025). - Remuneration approved far above actual payments
Minor- For FY ended 31/03/2026, remuneration approved for MD Jignesh Patel was ₹18.06 lakh but only ₹2.39 lakh was paid; for Executive Director Pankaj Pawar, ₹18.06 lakh approved and ₹2.29 lakh paid. Relatives of directors Gomtiben Patel and Priyanka Pawar were each approved ₹3.00 lakh with ₹0.50 lakh paid to each. Mr. Nandish Shaileshbhai Jani was appointed as Additional Director on 24th August 2026, with a Special Resolution proposed to regularize his appointment as Independent Director for 5 years. - Reported profit shaped by accounting-framework choices
Minor- Trom Industries prepared its FY2025-26 standalone financial statements under Indian GAAP/Accounting Standards, not Ind AS, and opted for the new tax regime under Section 115BAA with corporate tax at a concessional base rate of 22%. For FY2022-23, gratuity liability was determined by Management Certification rather than actuarial valuation. Weighted-average share count for FY2025 was reported as 9.19 crore shares in one filing versus 8,283,175 shares in another.
What to watch
- Related-party vote. Shareholder vote on Item 4 and Item 5 (approvals up to ₹10 Crores each with Aditya Engineering and Trom Industries) at the FY2025-26 AGM, per the notice in the annual report.
- Independent director regularization. AGM Special Resolution to regularize Mr. Nandish Shaileshbhai Jani as Independent Director, per notice in FY2025-26 Annual Report.
- Overdraft review. Annual review of the ₹25.00 crore Bank of Baroda overdraft facility, tenure 12 months subject to annual review, as disclosed in FY2025-26 Annual Report.
- RESCO project funding. Bank financing for approximately 27 megawatts to be executed within a year, as stated in Q2 FY26 earnings call (Sep 2025).
- H1 FY26 revenue conversion. Whether deferred billing on installed projects converts to revenue in H2 FY26 and whether inventory classified as work-in-progress is subsequently billed and collected.
Bottom line: This is an audited record with clean opinions but a persistent and material gap between reported profit and cash generation. The risk character is one of liquidity and related-party concentration: short-term borrowings secured by company deposits, rising related-party receivables, and proposed limits that would double exposure. Watch the AGM votes, the overdraft review, and whether deferred billing converts to cash in the second half.