Mihika Industries revenue collapses 92% as audit flags internal failures
Revenue dropped to ₹2.68 crore from ₹34.74 crore in FY26. The auditor flagged missing internal controls and unverifiable loans.
— 1 earlier story on Mihika Industries Ltd. →What's new
- Revenue fell to ₹2.68 crore from ₹34.74 crore in the prior year.
- Auditor S K Bhavsar & Co flagged a lack of internal controls and missing documentation.
- The company operated without a mandatory internal auditor for the entire fiscal year.
Why this matters
A company with a market cap of only ₹13 crore is now struggling with systemic governance failures. The inability to confirm basic trade balances or document loans suggests the business is effectively operating without oversight. This is a high-risk profile for any investor.
What we're watching
- Whether the company appoints an internal auditor to address the statutory lapse.
- Any clarification on the nature and recovery status of the unverifiable loans.
- The next set of quarterly disclosures for signs of operational stabilization.
The full read
Mihika Industries saw its business evaporate in FY26. Annual revenue plummeted 92% to ₹2.68 crore, down from ₹34.74 crore in the prior year.
Despite this collapse, the company managed a marginal net profit of ₹8.62 lakh. The real story, however, is the audit report from S K Bhavsar & Co. While the opinion is technically unmodified, the auditor used 'Emphasis of Matter' notes to detail a breakdown in basic governance. The company failed to appoint a mandatory internal auditor for the entire year. It also could not produce balance confirmations for trade receivables or payables, and it lacks documentation for loans granted to outside parties.
For a firm with a market cap of just ₹13 crore, these are not minor procedural errors. They are systemic failures in internal control. The company is currently operating in a black box where basic financial verifications are missing. It is a disaster.
Questions answered
- How did the company remain profitable despite a 92% revenue drop?
- Mihika reported a net profit of ₹8.62 lakh, a marginal increase from the ₹5.46 lakh reported in the previous year. The filing does not detail the cost-cutting measures that enabled this outcome.
- What specific internal control issues did the auditor highlight?
- The auditor noted the absence of a mandatory internal auditor for the entire year. Additionally, the company could not provide balance confirmations for trade receivables and payables or documentation for loans given to third parties.
- Did the auditor issue a qualified opinion?
- No, the auditor issued an unmodified opinion. However, they included multiple 'Emphasis of Matter' notes to highlight the severe lapses in documentation and internal controls.
- What is the scale of the company?
- Mihika Industries is a nano-cap company with a market capitalization of approximately ₹13 crore.
Story so far
All notes on MIHIKA →- 27 May 2026 · 7:19 PM IST Mihika Industries revenue collapses 92% as audit flags internal failures
- today Mihika Industries revenue drops 84% as auditor flags internal controls