CIAN Healthcare review flags unverified inventory and assets

CIAN Healthcare Limited received a qualified conclusion on its standalone results for the half year ended September 30, 2026 after the statutory auditor could not obtain sufficient evidence for Rs 21.99 crore of property, plant and equipment, Rs 6.16 crore of capital work-in-progress and Rs 4.75 crore of inventory.

Why did CIAN Healthcare receive a qualified conclusion?

CIAN Healthcare received a qualified conclusion because Rasool Singhal & Co identified four evidence limitations in the September 30, 2026 standalone results: inventory, property, plant and equipment with capital work-in-progress, balance confirmations, and Goods and Services Tax, or GST, input tax credit. The auditor issued its limited-review report on November 13, 2026 under Regulation 33 of the Securities and Exchange Board of India Listing Regulations.

The auditor stated that, except for the possible effects of these matters, nothing had come to its attention suggesting the unaudited statement did not meet required disclosure requirements or contained a material misstatement. A limited review provides moderate assurance through inquiries and analytical procedures rather than the procedures of a full audit, and the auditor did not express an audit opinion for the half-year statement.

The four matters were unresolved from earlier periods. The auditor said they had also been modifications in the predecessor auditor’s report for the year ended March 31, 2026 and its review report for the half year ended September 30, 2025, affecting comparability with the corresponding figures. The predecessor auditor gave a disclaimer of conclusion on the September 2025 half-year information on November 14, 2025 and a qualified opinion on the March 2026 annual financial statements on May 30, 2026.

Which CIAN Healthcare balances could the auditor not verify?

CIAN Healthcare’s largest specifically quantified verification issue was Rs 21.99 crore of property, plant and equipment at September 30, 2026. The auditor said CIAN Healthcare did not maintain a fixed-asset register containing full particulars, including quantitative details and location, and did not physically verify the assets during the half year. It consequently could not obtain evidence on the assets’ existence and carrying amounts or determine whether the half-year depreciation charge required adjustment.

Capital work-in-progress of Rs 6.16 crore was subject to the same physical-verification limitation. Management said both the property, plant and equipment and capital work-in-progress balances were carried from the audited March 31, 2026 accounts after additions, disposals and depreciation during the half year. CIAN Healthcare said it was compiling a complete fixed-asset register and expected both its completion and physical verification to occur by March 31, 2027.

CIAN Healthcare valued inventory of Rs 4.75 crore from book records because physical verification was not conducted in the half year ended September 30, 2026. The auditor said it had not received a statement showing inventory quantities and valuation, so it could not establish inventory existence, condition or valuation. It also could not determine whether adjustments were needed to inventory, cost of materials consumed, changes in inventory or half-year net profit.

What are the confirmation and GST credit issues at CIAN Healthcare?

CIAN Healthcare had not obtained confirmations for trade receivables, advances to others, advances to sundry creditors and trade payables by September 30, 2026. The auditor said it lacked both confirmations and alternative evidence sufficient to assess whether these carrying amounts, and the resulting half-year profit, required adjustment. The qualified-conclusion section does not disclose a combined value for the unconfirmed balances.

Management said CIAN Healthcare was seeking trade-receivable confirmations and had retained the book balances after considering the provision already made for doubtful trade receivables. It expects the confirmation exercise to be completed by March 31, 2027. Management said any reconciliation adjustments would be recorded in line with applicable accounting standards.

CIAN Healthcare also had an unreconciled difference between input tax credit in its books and the Electronic Credit Ledger on the GST portal at September 30, 2026. Management attributed this primarily to timing differences: purchases are booked after quality-control acceptance at the plant, while certain supplier invoices booked by CIAN Healthcare are not yet reflected in GSTR-2B because suppliers have not filed returns.

Management expects its supplier-wise and invoice-wise GST reconciliation to be completed by December 31, 2026. CIAN Healthcare said credit found ineligible or unavailable would be reversed, with related adjustments recorded under applicable accounting standards. The auditor did not quantify the GST difference, but said it could not determine the input-credit adjustment or consequential effect on half-year profit pending reconciliation.

How did CIAN Healthcare’s latest results compare with last year?

CIAN Healthcare reported revenue from operations of Rs 12.49 crore for the half year ended September 30, 2026, compared with Rs 11.32 crore in the corresponding 2025 half year, an increase of Rs 1.16 crore. The company operates in one business segment, pharmaceutical formulations, so the filing does not provide a product-line segment comparison.

Revenue outside India was Rs 9.39 crore in the September 2026 half year, while revenue within India was Rs 3.10 crore. Overseas revenue was therefore Rs 6.29 crore higher than domestic revenue. Total income, including other income, was Rs 12.90 crore, compared with Rs 11.55 crore in the September 2025 half year.

CIAN Healthcare reported standalone net profit after tax of Rs 21.75 lakh for the September 2026 half year, against a net loss of Rs 6.19 crore a year earlier. The auditor specifically said the continuing inventory, asset, balance-confirmation and GST matters affect comparison of current and corresponding figures, since the same matters were modified in the earlier reporting cycle.

Net cash used in operating activities was Rs 5.09 crore for the latest half year, compared with Rs 7.11 crore used in the September 2025 half year. Cash and cash equivalents were Rs 79.03 lakh at September 30, 2026, down from Rs 10.70 crore a year earlier. These reported movements do not resolve the evidence limitations identified in the limited-review report.

Conclusion

CIAN Healthcare’s qualified conclusion means the auditor could not independently obtain sufficient evidence for specified balances and their possible effects on profit, rather than identifying a stated misstatement. The quantified items include Rs 21.99 crore of property, plant and equipment, Rs 6.16 crore of capital work-in-progress and Rs 4.75 crore of inventory, while the confirmation and GST-credit issues were not quantified in the report.

The next disclosed milestones are management’s December 31, 2026 target for GST reconciliation and its March 31, 2027 targets for inventory verification, fixed-asset register completion, physical verification of assets and capital work-in-progress, and balance confirmations. CIAN Healthcare said it would record adjustments, including reversals of ineligible GST credit, if these processes identify differences.