Microse India Limited FY2026 results: a sharp reversal, a smaller balance sheet, and a reset in control functions

Microse India Limited’s audited results for the quarter and year ended March 31, 2026 show a year dominated by mark to market swings and trading outcomes, with the company reporting a net loss for the full year and a weak March quarter. For FY2026, revenue from operations stood at 136.27 lacs, with other income of 0.15 lacs, taking total revenue to 136.42 lacs. The year ended with a loss before tax of 180.09 lacs and a loss from continuing operations after tax of 172.32 lacs. Total comprehensive income for the year was a loss of 161.96 lacs.

The March quarter was markedly softer than the preceding quarter. Revenue from operations fell to 3.14 lacs in Q4 FY2026 from 136.27 lacs in Q3 FY2026. Total expenses rose to 21.36 lacs in Q4, driven mainly by other expenses of 12.59 lacs and change in inventory of 5.54 lacs, resulting in a quarterly loss before tax of 21.36 lacs and total comprehensive loss of 28.29 lacs.

The company’s notes make clear that reported revenue is not conventional operating revenue. Revenue from operations mainly includes loss arising from Futures and Options trading activities, and changes in inventories include gain or loss arising from fair valuation of inventory. That accounting context matters because it frames FY2026 as a year where trading and valuation outcomes, rather than a steady operating run rate, drove the shape of the profit and loss.

What moved the P and L: trading outcomes, fair value changes, and costs that stayed sticky

Microse’s quarterly print highlights the mismatch between a small revenue line in Q4 and a cost base that did not shrink at the same pace. Employee benefit expenses were 3.23 lacs in Q4 versus 3.53 lacs in Q3. Other expenses stepped up to 12.59 lacs in Q4 from 1.37 lacs in Q3. The change in inventory line also swung positive in Q4 at 5.54 lacs versus nil in Q3, consistent with the note that inventory is fair valued.

At the full year level, total expenses were 62.06 lacs, including employee benefit expenses of 12.01 lacs, purchases of 19.58 lacs, change in inventory of 11.82 lacs, and other expenses of 18.85 lacs. Yet despite total revenue of 136.42 lacs, the company reported a loss before tax of 180.09 lacs. This gap suggests that the trading driven revenue line, and the way gains or losses are recognized, can create outcomes that do not track linearly with the expense structure.

Other comprehensive income added another layer of volatility. For FY2026, the item that will be reclassified to profit and loss was 12.09 lacs, with an income tax effect of minus 1.73 lacs, yielding net other comprehensive income of 10.36 lacs. Even with that support, total comprehensive income remained a loss of 161.96 lacs.

The year also closed with earnings per share reported at minus 5.39 for FY2026. Paid up equity share capital remained steady at 216.41 lacs.

Balance sheet contraction: assets fell sharply, equity thinned, and payables declined

Microse’s standalone balance sheet as of March 31, 2026 shows a much smaller footprint than the prior year. Total assets declined to 152.97 lacs from 506.85 lacs as of March 31, 2025.

The biggest change was in current assets. Current assets fell to 100.26 lacs from 472.34 lacs. Trade receivables dropped sharply to 66.33 lacs from 424.27 lacs, which appears to be the main driver of the contraction. Inventories also reduced to 33.16 lacs from 44.78 lacs. Cash and cash equivalents stayed low at 0.74 lacs.

On the non current side, non current investments increased to 46.57 lacs from 34.49 lacs. Deferred tax assets rose to 6.12 lacs from nil. Fixed assets were flat at 0.02 lacs.

On the liabilities and equity side, shareholders’ funds reduced materially. Share capital stayed at 216.41 lacs, but reserves and surplus moved deeper into negative territory at minus 171.34 lacs versus minus 9.38 lacs a year earlier. As a result, total shareholders’ funds declined to 45.07 lacs from 207.03 lacs.

Current liabilities also declined, consistent with the smaller balance sheet. Trade payables reduced to 103.31 lacs from 295.21 lacs. Total current liabilities were 107.90 lacs versus 299.81 lacs. There were no borrowings shown under long term or short term borrowings in the assets and liabilities statement.

This balance sheet shape matters for investors because it signals a reset in the scale of working capital items, especially receivables and payables. But it also highlights a thinner equity cushion due to accumulated losses reflected in reserves.

Cash flow: operating cash inflow driven by working capital movement, financing outflow offsets

The cash flow statement for the year ended March 31, 2026 shows how accounting losses and cash movement diverged. Profit before tax was minus 180.09 lacs, but operating cash flow turned positive after working capital changes.

Cash generated from operating activities was reported at 197.23 lacs, and cash generated from operating activities after tax adjustment was 197.20 lacs. The working capital section shows a large movement in other current assets of 357.94 lacs, alongside smaller movements in trade receivables of 11.62 lacs and current tax assets of 2.57 lacs. These line items collectively drove a working capital increase of 372.07 lacs.

Investing cash flow was small and positive. Interest received was 0.20 lacs, and net cash used in investing activities was reported as 0.20 lacs.

Financing cash flow was negative. Finance cost was minus 5.45 lacs and short term borrowing received was minus 191.90 lacs, resulting in net cash used in financing activities of minus 197.35 lacs.

Net change in cash and cash equivalents was a marginal increase of 0.05 lacs, with closing cash at 0.74 lacs.

Taken together, the FY2026 cash flow emphasizes that the year’s cash position was stabilized not through operating profitability but through movements in balance sheet items, and that financing flows were a net outflow.

Governance and compliance signals: internal auditor change and an emphasis of matter on NBFC format

Alongside the results, the board meeting outcome filed with the exchange provides two governance related datapoints. The board noted the resignation of M/s Laddha & Laddha as internal auditors with effect from May 31, 2026, and approved the appointment of M/s ARK Jain & Associates (FRN 021769C) as internal auditors for FY2026-27.

The disclosure describes ARK Jain & Associates as a Mumbai headquartered firm of chartered accountants serving companies in accounting, audit, taxation, international tax, transfer pricing, and regulatory advisory. The appointment is for FY2026-27 on terms and conditions to be mutually agreed.

The statutory auditor, Todarwal & Todarwal LLP, issued an unmodified opinion on the audited standalone annual financial results. However, the report includes an emphasis of matter: the company, being a Non Banking Financial Company, is required to prepare and present half yearly or annual financial results in the format prescribed under Annexure II of the relevant SEBI circular applicable to banks and NBFCs, while the company presented the financial results in the format prescribed under Annexure I applicable to companies other than banks and NBFCs. The auditor stated that the opinion is not modified in respect of this matter.

For investors, that emphasis of matter is a reminder that presentation format and regulatory alignment can become part of the scrutiny in small listed entities, even when the underlying numbers are audited. The internal auditor change sits in the same theme: strengthening or resetting internal control and compliance processes as the company moves into FY2027.

Investor takeaways: a volatile earnings base, a smaller balance sheet, and a focus on control functions

FY2026 reads as a year of sharp negative performance for Microse India Limited, with a full year loss after tax of 172.32 lacs and negative earnings per share. The quarter ended March 2026 also showed weak revenue from operations and higher expenses, resulting in a quarterly loss.

The underlying business reality, as disclosed in the notes, is that the revenue line is heavily influenced by Futures and Options trading outcomes, and inventory is subject to fair value changes. That structure can produce sudden swings in quarterly and annual results. The balance sheet contraction, especially the reduction in trade receivables and trade payables, shows a smaller operating footprint and a reworked working capital base. At the same time, reserves moved materially further negative, reducing shareholders’ funds.

Looking into FY2027, the cleanest signals in the disclosure are not growth initiatives but process and oversight changes: the appointment of a new internal auditor for FY2026-27 and the auditor’s emphasis of matter around the NBFC presentation format. For investors tracking Microse, the next set of filings will matter for two reasons. First, whether the company can reduce volatility in reported revenue and translate activity into consistent profitability. Second, whether financial reporting format and internal control processes show steadier compliance, which becomes more visible when earnings are under pressure.