Mihika Industries reported a severe contraction in revenue for FY26, driven by a significant drop in trading volumes, while net profitability improved due to lower tax expenses. Revenue from operations fell 92% year-on-year to ₹2.67 crore, down from ₹34.73 crore in FY25. However, net profit after tax (PAT) rose 58% to ₹8.62 lakh, compared to ₹5.46 lakh in the prior year. The divergence between revenue collapse and profit growth was primarily aided by a reduction in tax of earlier years, which stood at nil in FY26 versus ₹5.68 lakh in FY25. The Board of Directors recommended no dividend for the year to conserve resources for future growth.

The financial results were qualified by statutory auditors M/s. S K Bhavsar & Company, citing material weaknesses in internal controls. The auditors highlighted that the company failed to appoint an Internal Auditor for the entire financial year, violating Section 138 of the Companies Act, 2013. Additionally, management did not provide balance confirmation letters or party-wise reconciliation statements for certain trade receivables and payables as of March 31, 2026. The absence of supporting documents for inventory valuation also prevented the auditors from obtaining appropriate evidence on asset completeness.

Financial Performance Snapshot

Beyond the annual results, the company announced several strategic and governance changes ahead of its 43rd Annual General Meeting (AGM) scheduled for September 1, 2026. The Board approved a proposal to raise up to ₹90 crore through a rights issue of equity shares with a face value of ₹10 each. This capital raise aims to fund future business prospects and working capital requirements. Concurrently, shareholders will vote to increase the authorized share capital tenfold, from ₹10 crore to ₹100 crore, by creating an additional nine crore equity shares.

Governance and Audit Observations

The secretarial audit report by M/s. Jay Pandya & Associates flagged multiple regulatory non-compliances. These included the failure to publish newspaper advertisements for quarterly results for the quarter ended June 30, 2025, and delays in submitting voting results for the quarter ended September 30, 2025. The company also lacked a qualified Company Secretary for three consecutive quarters in FY26, though it has since filled the vacancy with Ms. Umang Agrawal. The Board has shifted its registered office from Kolkata to Ahmedabad, Gujarat, seeking administrative convenience.

Management disclosed that related party transactions with M/s. Veggie Fest Foods Private Limited, a promoter entity, may exceed the material threshold under SEBI Listing Regulations. Shareholders are asked to approve transactions worth up to ₹50 crore involving the purchase and sale of goods, leasing, and services. During FY26, purchases from Veggie Fest Foods totaled ₹29.50 lakh, while sales amounted to ₹1.00 lakh. The Board appointed Mr. Bipinbhai Becharbhai Prajapati as Managing Director and CFO for a five-year term, effective October 18, 2025.

Mihika Industries reported a net profit of ₹1.43 lakh for the quarter ended June 30, 2026 (Q1FY26), an improvement from the ₹1.91 lakh profit posted in the same period last year. Despite the bottom-line stability, top-line performance contracted significantly, with total income falling 67% year-on-year to ₹59.51 lakh from ₹181.51 lakh. This decline reflects a substantial reduction in trading volumes for the agriculture product trader, though profitability was maintained through controlled operating expenses and favorable inventory adjustments.

The Board of Directors approved the unaudited financial results during a meeting held on July 23, 2026, at its corporate office in Ahmedabad. Pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company published newspaper advertisements of the extract of unaudited financial results on July 25, 2026. The advertisements appeared in The Echo of India (English) and Aarthik Lipi (Bengali). Managing Director Bipinbhai Prajapati signed the disclosure submitted to BSE Limited on July 27, 2026.

Financial Performance Breakdown

The significant drop in income was primarily driven by a steep reduction in purchases of stock-in-trade. In Q1FY26, purchases amounted to nil, compared to ₹380.08 lakh in Q1FY25. This indicates a major slowdown in new inventory acquisition during the current period. Total expenses stood at ₹58.08 lakh, down significantly from ₹179.59 lakh in the corresponding quarter of the previous year. The expense reduction was largely due to the absence of stock purchases and changes in inventories.

While purchases were nil, the company recorded a negative change in inventories of ₹50.68 lakh, which reduced total expenses. In contrast, Q1FY25 saw a positive change in inventories of ₹208.23 lakh, contributing to higher costs. Other income remained stable at ₹14.24 lakh, slightly up from ₹13.84 lakh in the previous quarter. Employee benefit expenses decreased to ₹1.55 lakh from ₹3.86 lakh in Q4FY25.

What the Numbers Show

The divergence between revenue decline and profit retention highlights the impact of inventory management on Mihika Industries’ bottom line. With no new stock purchases in Q1FY26, the company’s revenue recognized likely stemmed from sales of existing inventory or deferred recognitions, rather than active trading cycles. The absence of cost of materials consumed and depreciation suggests minimal operational overheads beyond employee benefits and general expenses. This lean structure allowed the company to maintain profitability despite a 67% drop in total income, indicating that fixed costs are low relative to variable trading activities.

Auditor Review and Compliance

S K Bhavsar & Co., the statutory auditors, conducted a limited review of the financial results in accordance with Standard on Review Engagement (SRE) 2410. The audit firm issued a clean report, stating that nothing came to their attention to suggest the financial statements contained material misstatements or failed to comply with Ind AS and SEBI regulations. The review provided moderate assurance that the interim financial information was free from material errors.

The company operates exclusively in the trading of agriculture products and has no reportable segments under Ind AS. Paid-up equity share capital remains unchanged at ₹1,000 lakh, with a face value of ₹10 per share. Earnings per share (basic and diluted) stood at ₹0.01 for the quarter. Reserves and surplus as shown in the audited balance sheet of the previous year were ₹0.00 lakh, while year-to-date reserves as of March 31, 2026, stood at ₹1,196.99 lakh.