Add-Shop E-Retail profits plunge 68% as auditor flags ₹23 cr in unverifiable expenses
Audited results for FY26 show margins collapsing under the weight of an ongoing SEBI probe and massive outstanding receivables.
— 2 earlier stories on Add-Shop E-Retail Ltd. →What's new
- Net profit fell to ₹105.40 lakhs, down from ₹331.79 lakhs in FY25.
- Trade receivables have ballooned to 72% of total revenue.
- Auditor raised alarms over an active SEBI interim order and show cause notice.
Why it matters
The company’s ability to collect cash is failing, with receivables consuming nearly three-quarters of revenue. When an auditor explicitly cites the inability to verify ₹23.22 crore in commissions, the financial statements lose their utility. Investors are left with deep uncertainty.
What we're watching
- The outcome of the SEBI show cause notice.
- Any further qualification of accounts by the newly appointed internal auditor.
- Developments regarding the massive outstanding receivables.
The full read
Add-Shop E-Retail ended FY26 with a 68% profit collapse, posting ₹105.40 lakhs in net earnings against ₹15,520.40 lakhs in revenue.
Margins are vanishing.
The company’s auditor refused to sign off on ₹23.22 crore of distribution commissions, labeling them unverifiable in the latest filings. This is compounded by a massive liquidity problem, as trade receivables now represent 72% of total revenue. These fiscal issues persist alongside serious legal headwinds, specifically an interim SEBI order and a corresponding show cause notice directed at the firm. The board has appointed M/s. Princy Mehta & Associates as internal auditor to address these governance gaps. Given the market capitalization of just ₹20 crore, these disclosures reveal a severe breakdown in both financial transparency and regulatory compliance. The firm faces a dual crisis of uncollectible revenue and unverified expenses that will be nearly impossible to manage.