Deep Polymers Limited reported a standalone net profit of Rs 2.15 crore for the quarter ended September 30, 2026. However, statutory auditors issued a qualified opinion, citing non-provision for doubtful debts worth Rs 1.08 crore and non-compliance with Ind AS-21 foreign currency restatement. Investors should note this is the seventh consecutive standalone audit qualification for the company.
Deep Polymers Q2 Results and Audit Qualification
Standalone Net Profit: Rs 2.15 crore vs Rs 1.75 crore in Q2 FY26.
Revenue from Operations: Rs 29.26 crore vs Rs 25.75 crore in Q2 FY26.
Reader Takeaway: Rising revenue faces governance friction as recurring auditor qualifications regarding profit overstatement and accounting compliance persist.
What just happened
Deep Polymers released its financial results for the quarter ended September 30, 2026, showing a year-on-year increase in both revenue and net profit. However, the company's statutory auditors, M/s. S N Shah & Associates LLP, issued a qualified opinion on the financial statements. This marks the seventh time the company has received a qualification on standalone statements.
Why this matters
The auditor qualification centers on two key issues that investors must monitor:
- Non-provision for doubtful debts: The company has not provided for Rs 1.08 crore in trade receivables currently under legal recovery. The auditor stated this resulted in an overstatement of profits and shareholder funds.
- Non-compliance with Ind AS-21: The company failed to restate foreign currency-denominated monetary items at the current period-end exchange rates, impacting asset, liability, and profit balances.
Management response
Management maintains that the Rs 1.08 crore receivable is recoverable through ongoing legal proceedings and will re-evaluate in the next financial year. Regarding foreign currency restatement, the company argued the impact was not material enough to warrant an immediate restatement, promising corrective action in future cycles.
Risks to watch
Investors should consider the recurring nature of these audit qualifications. With this being the seventh occurrence, it signals potential systematic issues in financial reporting and governance. The audit notes suggest that reported figures may be higher than what would be presented under strict adherence to Ind AS accounting standards.
What to track next
Watch for the outcome of the legal recovery proceedings for the Rs 1.08 crore receivable. Additionally, monitor the next quarterly filing to see if management honors its commitment to correct the Ind AS-21 compliance issues, as further qualifications may impact market confidence in the company's financial transparency.