Milkfood's ₹44 cr profit is mostly an asset sale. The auditor isn't convinced.
A qualified audit opinion challenges the very gains that inflated Milkfood's FY26 profit. Strip them out, and net profit is just ₹9.81 crore.
— 2 earlier stories on Milkfood Ltd. →What's new
- Milkfood's FY26 net profit of ₹44.29 crore included ₹70.42 crore in one-off gains from a plant sale and land revaluation.
- The statutory auditor issued a qualified opinion on the accounting for the land revaluation, vehicle depreciation, and share-based expenses.
- After adjustments for the disputed items, the company's profit drops to just ₹9.81 crore.
Why this matters
The headline profit surge is an artifact of asset sales, not operating performance. The auditor's qualifications go to the heart of how the company values its assets, which matters for a nano-cap with outstanding GST disputes. The real question is what happens to the balance sheet if those asset values are written down.
What we're watching
- Whether Milkfood addresses the auditor's specific accounting objections in a future filing.
- The resolution of the GST disputes and contingent liabilities disclosed in the notes.
- How the market reprices the stock once the one-off gains are excluded from valuations.
The full read
Milkfood Ltd reported FY26 net profit of ₹44.29 crore, a number that looks like explosive growth from last year's ₹4.52 crore. The reality is thinner. ₹70.42 crore of that profit came from selling the Moradabad plant and revaluing the Patiala land. Revenue from operations actually fell 7.8% to ₹412.93 crore. More critically, the statutory auditor issued a qualified opinion, challenging the accounting for the land revaluation, a retrospective change to vehicle depreciation, and share-based expenses. Strip out the disputed items and the profit is just ₹9.81 crore. For a nano-cap with outstanding GST disputes and contingent liabilities, the gap between the ₹44 crore headline and the ₹9.81 crore adjusted figure is the whole story. The auditor has put a question mark over the assets that made the year look good.
Questions answered
- How did Milkfood report a profit of ₹44.29 crore when revenue fell?
- The profit was inflated by ₹70.42 crore in exceptional gains from selling the Moradabad plant and revaluing the Patiala land. Revenue from operations fell 7.8% to ₹412.93 crore, showing the core business was shrinking.
- What did the auditor challenge in the accounts?
- The auditor issued a qualified opinion on three items: the accounting for the Patiala land revaluation, a retrospective change to the useful life of vehicles, and the classification of share-based expenses. These are not minor disclosures.
- What is the profit figure without the disputed accounting?
- After removing the effects of the qualified items, Milkfood's net profit for FY26 was ₹9.81 crore, not the reported ₹44.29 crore.
- What other financial risks does the company face?
- The filing disclosed significant contingent liabilities and unresolved GST disputes, adding further uncertainty to the balance sheet of a company with a ₹412.93 crore revenue base.
Milkfood Ltd.
Latest quarter · Sep 2025
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Story so far
All notes on MLKFOOD →- 22 May 2026 · 4:47 PM IST Milkfood's ₹44 cr profit is mostly an asset sale. The auditor isn't convinced.
- 6d ago Milkfood raises ₹6.6 cr via warrants to MD, president
- 45d ago Milkfood's auditor finds accounting errors behind its reported profit