Mihika Industries revenue drops 92% as auditors flag internal failures
Revenue fell to ₹2.67 cr from ₹34.74 cr in FY26. The auditor flagged missing inventory records, unverified loans, and a lack of internal controls.
— 2 earlier stories on Mihika Industries Ltd. →What's new
- Revenue plummeted to ₹2.67 cr from ₹34.74 cr in the previous year.
- Auditor S K Bhavsar & Co flagged missing inventory and loan documentation.
- The company failed to appoint a mandatory internal auditor for the entire year.
Why this matters
A nano-cap company with a ₹13 cr market cap reporting such systemic governance failures is a red flag for financial integrity. The auditor's findings suggest the reported net profit of ₹8.62 lakhs may not be reliable.
What we're watching
- Whether the company appoints an internal auditor in the coming quarter.
- Any regulatory response to the non-compliance with the Companies Act.
- Attempts to reconcile the missing balance confirmations for receivables.
The full read
Mihika Industries reported a 92% collapse in annual revenue for FY26, with turnover falling to ₹2.67 crore from ₹34.74 crore the previous year. While the company recorded a marginal net profit of ₹8.62 lakh, its statutory auditor, S K Bhavsar & Co, issued an 'Emphasis of Matter' report detailing severe internal control deficiencies.
The auditor cited the total absence of a mandatory internal auditor for the entire year, missing inventory valuation documentation, and unverified loans granted to third parties without supporting agreements. Also, the audit revealed a lack of balance confirmations for trade receivables and payables, casting doubt on the integrity of the company's financial reporting. For a company with a market cap of only ₹13 crore, these systemic governance failures are difficult to overlook. The reported profit is secondary to the fact that the auditor cannot verify the underlying financial data.
It is a mess.
Questions answered
- What did the auditor specifically flag regarding internal controls?
- S K Bhavsar & Co cited a total absence of a mandatory internal auditor for the full year. They also noted missing documentation for inventory valuation and loans granted to third parties.
- How did the company's financial performance change year-over-year?
- Revenue fell 92% to ₹2.67 crore from ₹34.74 crore in the previous year. Despite this, the company reported a marginal net profit of ₹8.62 lakh.
- Why are the 'Emphasis of Matter' notes concerning?
- These notes highlight material weaknesses in internal controls and financial reporting integrity. They suggest that the company's financial records may not be reliable.
- What is the scale of Mihika Industries?
- It is a nano-cap entity with a market capitalization of approximately ₹13 crore.
Story so far
All notes on MIHIKA →- 27 May 2026 · 9:53 PM IST Mihika Industries revenue drops 92% as auditors flag internal failures
- today Mihika Industries revenue collapses 92% as audit flags internal failures
- today Mihika Industries revenue drops 84% as auditor flags internal controls