Mishtann Foods Limited announced its unaudited financial results for the quarter and nine months ended December 31, 2025, presenting a mixed performance amid ongoing regulatory challenges. The Board of Directors approved these results at their meeting held on February 13, 2026.

Consolidated Financial Performance

The company's consolidated operations demonstrated substantial revenue generation during Q3FY26, though with notable year-over-year variations across different metrics.

For the nine-month period ended December 31, 2025, consolidated revenue reached ₹1,10,951.70 lakhs compared to ₹1,05,972.48 lakhs in the corresponding period of the previous year, representing a growth of 4.70%. Net profit for the nine-month period stood at ₹25,963.52 lakhs versus ₹25,493.80 lakhs in the previous year.

Standalone Operations

The standalone financial results showed more modest performance levels compared to the consolidated figures, reflecting the contribution of the parent company operations.

Auditor Qualifications and Regulatory Issues

The financial results received qualified opinions from statutory auditors H Thakkar & Co. LLP, highlighting several significant concerns that continue to impact the company's operations.

SEBI Allegations: The company faces an Interim Order cum Show Cause Notice dated December 5, 2024, from SEBI alleging that substantial portions of sales and purchase transactions from FY2017-18 to FY2023-24 were fictitious. SEBI has also alleged misutilization of rights issue proceeds amounting to ₹4,990.00 lakhs.

Trade Receivables Concerns: Outstanding trade receivables of ₹56,654.71 lakhs constitute approximately 97% of total assets as of September 30, 2024. The company has not made provisions for Expected Credit Loss as required under Ind AS 109, and auditors noted no payments to suppliers or collections from customers during the review period.

Pending Legal and Tax Matters

The company faces multiple regulatory and tax challenges that represent contingent liabilities:

Subsidiary Operations

The consolidated results include contributions from Grow and Grub Nutrients FZ-LLC, a wholly-owned subsidiary incorporated in the UAE on April 19, 2023. The subsidiary contributed significantly to the consolidated performance with total revenues of ₹26,492.71 lakhs and net profit of ₹8,079.59 lakhs for Q3FY26.

Management Response

The management has categorically denied all SEBI allegations and is pursuing legal remedies. Regarding compliance issues, the company plans to implement audit trail features in accounting software starting from the fourth quarter of FY2025-26. Management maintains that trade receivables remain regular with no bad debt instances recorded in the past five years, attributing extended payment cycles to market penetration strategies for salt products.

Mishtann Foods Limited, a player in the Indian food industry, has released its financial results for the quarter ended September 30, revealing a complex financial situation amidst significant regulatory and audit challenges.

Financial Performance

The company reported standalone revenue of Rs 69.12 lakhs and consolidated revenue of Rs 38,608.81 lakhs for the quarter. While this represents an increase from the previous year's consolidated revenue of Rs 3,420.00 lakhs, the company's profitability has declined.

Regulatory Challenges

Mishtann Foods faces serious regulatory issues, including a SEBI show cause notice dated December 5. The notice alleges:

1. Fictitious sales and purchase transactions from FY2017-18 to FY2023-24
2. Misutilization of rights issue proceeds worth Rs 4,990.00 lakhs

The company's management has denied all SEBI allegations and is pursuing legal remedies.

Audit Concerns

The auditors issued qualified opinions on both standalone and consolidated results, citing multiple concerns:

1. High trade receivables of Rs 49,585.48 lakhs (97% of total assets)
2. Lack of audit trail software implementation
3. No provision for expected credit losses
4. GST demand of Rs 20,684.38 lakhs
5. Unpaid income tax provisions of Rs 5,227.67 lakhs

Corporate Governance Developments

Mishtann Foods announced several corporate governance changes:

1. Appointment of J.M. Patel Bros as Tax Auditor
2. Appointment of Rajesh Chinubhai Sutaria as Additional Independent Director for a 5-year term, subject to shareholder approval
3. Reconstitution of the Audit Committee with Ms. Rainy Ramesh Singhi as Chairperson, and Mr. Ashish Agarwal and Mr. Kush Jigenbhai Shah as members

Market Implications

The financial results, regulatory challenges, and audit concerns present a complex picture for Mishtann Foods. The company's ability to address these issues while maintaining its operations may be crucial for its future performance and market position.

Investors and stakeholders may need to closely monitor the company's responses to the SEBI allegations, its efforts to resolve audit concerns, and its overall financial management in the coming quarters.