Manpasand beverages no longer seems investors pasand (choice), takes a nosedive of 50% over auditor’s exit
Manpasand Beverages continues its sharp downfall for the fourth consecutive day as investors have turned cautious over:
- It’s auditor, Deloitte abruptly quiting before the Board meeting, and
- the firm cancelling its Board meeting, which was scheduled on May 30, 2018.
The company issued a statement to exchanges assuring that situation involving Deloitte was ‘unfortunate’ and that the event is just a minor hiccup and doesn’t represent any long term business impact.
Besides, the company’s management, in an interview to CNBC-TV18, said that the auditor had sought more information, which was delayed on the back of system upgrades. Further, distribution-related information was pending from the company’s side, it said, adding that due to logistical issues, it could not be done on time.
They have now appointed a new auditor, Mehra Goel & Co and is working towards declaring results by 15th June, 2018.
Why is this important
Sudden exit of a reputed auditor raises significant concerns over accountability and credibility of business and accounting. Moreover, Religare Broking has suspended coverage on the stock, citing lack of clarity on resignation of its auditors. It also flagged concerns on lack of disclosures provided by the firm with respect to this issue.
Although management claims it to be a minor hiccup, investors have surely reacted in a major way causing the stock to plummet by 50% over a period of four days.
How the stock has been impacted
Manpasand Beverages (CMP: Rs. 223.50, MCap: Rs. 2,558 crs, FY18E P/E 28.3X) has already been impacted with a fall of 50%. In the coming few days, it remains to be seen how the results come out and what further impact will the stock take.