Statement of Deviation
Awaiting price reaction for this filing.
Sharanam Infraproject reported a sharp jump in FY25 earnings, with revenue from operations rising to Rs. 3,740.11 lakh (vs Rs. 176.07 lakh in FY24) and net profit of Rs. 508.34 lakh (vs Rs. 2.58 lakh). Q4 alone posted revenue of Rs. 2,384.05 lakh and profit of Rs. 394.23 lakh. The company raised Rs. 47.40 crore via a Rights Issue on Feb 14, 2025 (allotted for Rs. 36 crore working capital and Rs. 10.50 crore general corporate purpose), but as of March 31, 2025, NIL funds had been utilized, with the company declaring 'No Deviation'. Crucially, the statutory auditor issued a Disclaimer of Opinion, citing inability to verify balances due to missing trade receivable/payable confirmations, unverifiable bank transactions, absence of interest documentation on a Rs. 118.08 lakh unsecured loan, non-filing of GST returns from July 2024 to March 2025, missing inventory records, and unconfirmed supplier advances of Rs. 4,325.60 lakh and customer advances of Rs. 1,317.51 lakh. Related party transactions disclosed include director and KMP remuneration totaling roughly Rs. 71 lakh for the quarter.
Despite the impressive headline revenue and profit growth, the auditor's Disclaimer of Opinion is a major red flag – investors should treat the reported numbers as unverified. The Rights Issue funds remain completely unutilized two months after raising, raising questions on deployment plans. Stock may face volatility and regulatory scrutiny over audit qualifications and pending GST filings.