Khaitan (India) Ltd reported a 45% revenue jump to Rs 112.23 crore for FY26, though profits dipped to Rs 6.06 crore. Auditors have issued a qualified opinion, challenging the management's decision to classify suspended sugar mill operations as a 'continuing business'.
Khaitan (India) Ltd: Revenue Up 45%, Auditor Scrutiny Intensifies
Revenue grew to Rs 112.23 crore in FY26; Profit after tax stood at Rs 6.06 crore.
Reader Takeaway: Strong revenue growth in electricals is overshadowed by auditor concerns regarding the long-term suspended sugar mill operations.
What just happened
Khaitan (India) Ltd has released its FY26 financial results ahead of its 89th Annual General Meeting scheduled for September 25, 2026. The company recorded a significant 45% increase in revenue to Rs 112.23 crore, bolstered by its electrical goods trading division. However, the bottom line narrowed, with profit after tax falling to Rs 6.06 crore from Rs 6.98 crore in the previous year, hampered by rising input costs.
Why this matters
The statutory auditor, K.C. Bhattacharjee & Paul LLP, has issued a qualified opinion regarding the company's sugar mill division. The auditors argue that because the mill has suspended production for an extended period, it should be categorized as 'Discontinued Operations'. Management continues to treat it as a 'continuing business', claiming the suspension is temporary and linked to working capital constraints. This discrepancy creates uncertainty regarding asset valuation and financial reporting accuracy.
Governance and Board Updates
The company faces a period of transition in its leadership. Four independent directors—Mr. Manoj Chhawchharia, Mr. Ajay Ahlawat, Mr. Sandip Chatterjee, and Ms. Sujata Chatterjee—resigned during the fiscal year. They were succeeded by Ms. Pooja Kalanouria and Ms. Ayushi Khaitan in June 2025. Additionally, the board has proposed a second five-year term for Independent Director Mr. Gopal Mor.
Risks to watch
Investors should be cautious regarding the dividend policy, as the board has decided to withhold payments to preserve cash for expansion. Furthermore, the persistent classification of the dormant sugar mill as a 'continuing business' remains a governance risk that could draw further regulatory or shareholder scrutiny during the upcoming AGM.
What to track next
Shareholders should monitor management's explanation at the AGM regarding the revival strategy for the sugar division and potential impacts of the auditor's qualification on future financial statements.