The Insolvency Service is to deploy artificial intelligence to root out rogue directors who deliberately fold their companies to dodge tax and walk away from their debts, but the agency has admitted its new taskforce cannot fix an £800 million problem on its own.

The chancellor committed £25 million over five years in November’s budget to fund a 50-strong unit dedicated to investigating suspicious company insolvencies. Its target is so-called “abusive phoenixism”, the practice of liquidating or dissolving a company to escape tax liabilities and creditors, only for the business to rise again under a new corporate shell.

Phoenixism accounted for 22 per cent of the £3.8 billion in total tax losses in 2022-23, according to HM Revenue & Customs estimates, and the practice has long been a source of frustration for the small firms left unpaid when a customer or supplier collapses and quietly reappears under a new name.

Dave Magrath, director of investigation and enforcement services at the Insolvency Service, said enforcement outcomes were “really important” but warned they would not be enough. “On their own, they won’t solve the problem. The problem is a much greater one and it probably needs some of our policy people to really think about that tension between [directors] starting [companies] again and phoenixism.”

The taskforce, which began work in April and expects to be fully operational next year, grew out of joint work between HMRC, Companies House and the Insolvency Service. It will lean heavily on technology to find its targets. “We’re looking at the hundreds of thousands of companies that dissolve every year,” Magrath said. “We need some tech power to help us hone in and find the needle in the haystack around where the harm is.”

The move follows a damning National Audit Office report in 2024, which found that some small businesses were easily exploiting weaknesses in government systems to evade tax and that there had been a lack of focus on phoenixism. The watchdog, which also warned that small businesses account for around 80 per cent of UK tax evasion, revealed that the Insolvency Service had disqualified just seven directors for phoenixism between 2018-19 and 2023-24, out of 6,274 disqualified directors in total.

As part of the drive to ban more rogue directors, the Company Directors Disqualification Act is set to be amended, following a recent consultation, to widen the circumstances in which law-breaking directors can be struck off. The reform sits alongside Companies House’s rollout of identity verification for directors, another measure aimed squarely at phoenix operators.

Recent cases illustrate the scale of the abuse. The owner of a Burton fire alarm installation company was banned after paying himself almost £400,000 across two companies while handing HMRC just £5,368, while an Oxfordshire landscaping boss ignored his director ban and left £300,000 in unpaid tax across two companies. In one of the more extreme examples, a director linked to more than 400 companies was banned for nine years for helping struggling firms subvert the insolvency system.

Magrath acknowledged the difficulty of striking a balance between allowing entrepreneurs who fail for legitimate reasons to try again and clamping down on abuse, particularly at a time when the country is “striving for economic growth”. He said he hoped the “heart of the solution” would come from the recent civil enforcement consultation, which could see restrictions applied to directors with a pattern of repeated, harmful failures in lower-level cases, while still allowing them to “contribute to the economy”.

Caroline Sumner, chief executive of R3, the trade body for restructuring, turnaround and insolvency professionals, welcomed the taskforce as a response to “a longstanding issue”.

“Phoenixism undermines confidence in the business environment and can leave creditors, including small businesses and HMRC, out of pocket, so co-ordinated action is essential,” she said. “Measures such as strengthened identity checks for directors and improved data sharing should make it easier to identify and act on misconduct.

“Ensuring that the director disqualification regime is robustly applied and that there are sufficient resources and powers to pursue repeat offenders will be critical to the taskforce’s success.”

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.

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Investors weighing Meta Platforms against Alphabet in 2026 are confronting two of the technology sector’s largest artificial intelligence bets, each pursuing a distinct strategy for turning massive infrastructure spending into long-term returns. While both companies have posted strong quarterly results this year, analysts remain divided on which stock offers the better risk-reward profile heading into the second half of 2026.

Note: This article is intended to provide factual context for investors and does not constitute financial advice. Individuals should consult a licensed financial advisor before making investment decisions.

Both companies reported first-quarter 2026 results on April 29, giving investors a fresh look at how each business is performing amid an escalating AI spending race. Meta reported first-quarter revenue of $56.31 billion, up 33 percent year over year, with advertising revenue reaching $55.02 billion on the strength of a 19 percent increase in ad impressions and a 12 percent rise in average price per ad. Chief Executive Mark Zuckerberg described the results as “a milestone quarter” tied to output from Meta Superintelligence Labs, the company’s dedicated AI research division. Reality Labs, the unit responsible for the company’s virtual and augmented reality initiatives, including its AI glasses line, posted a $4.03 billion operating loss on just $402 million in revenue, a gap that continues to weigh on the company’s overall profitability.

Alphabet, meanwhile, reported first-quarter revenue of $109.9 billion, up 22 percent year over year, with Google Cloud emerging as the standout segment. Cloud revenue surged 48 percent to $17.66 billion, with operating income more than doubling to $5.31 billion. Alphabet’s cloud backlog has been reported at roughly $155 billion to $460 billion depending on the reporting period cited, giving the company substantial forward revenue visibility. Alphabet’s Gemini AI assistant has also scaled rapidly, with monthly active users reported at 750 million and enterprise-focused Gemini usage growing sharply on a quarter-over-quarter basis.

Capital spending plans highlight the differing strategies. Meta has guided for 2026 capital expenditures of between $115 billion and $145 billion, primarily directed toward AI infrastructure, custom chips and data center capacity. Alphabet’s 2026 capital expenditure guidance is considerably higher, ranging from $175 billion to $190 billion depending on the reporting period, spread across Google Cloud, YouTube, Waymo and broader AI infrastructure. Alphabet’s free cash flow has come under pressure as a result, falling sharply in some reported periods even as revenue growth remained strong, while Meta’s operating margin has compressed from roughly 48 percent to around 41 percent amid its own spending surge.

Valuation has emerged as one of the central differences separating analyst opinions on the two stocks. Meta has generally traded at a forward price-to-earnings multiple in the range of 20 to 23 times, while Alphabet’s multiple has been reported anywhere from roughly 16 to 28 times depending on the specific valuation model and time period referenced. Financial research firm GuruFocus has given Meta a perfect GF Score of 100 out of 100, suggesting the stock may be undervalued by approximately 10 percent relative to its calculated fair value, while assigning Alphabet a GF Score of 93, reflecting strong fundamentals but a comparatively more expensive entry point by some measures.

Analyst price targets also diverge notably between the two companies. Consensus estimates for Meta have clustered around $826 to $864 over a 12-month horizon, with some high-end estimates reaching as much as $1,015, implying upside of more than 30 percent from various recent trading levels. Alphabet’s consensus price targets have generally ranged from roughly $373 to $413, with some estimates as low as $352 and others as high as $515, reflecting more modest single-digit to low-double-digit implied upside in most scenarios. Alphabet has carried a Moderate Buy to Strong Buy rating across a wide range of covering analysts, with the vast majority issuing buy ratings and few, if any, sell recommendations. Meta has similarly drawn a Strong Buy consensus from a large group of analysts.

Stock performance between the two names has varied considerably depending on the period examined. In the weeks following their respective April earnings reports, Alphabet shares outperformed, gaining approximately 10.8 percent, while Meta’s stock was largely flat to slightly lower over the same stretch, reflecting investor enthusiasm for Google Cloud’s acceleration weighed against continued concerns about Meta’s capital spending trajectory and ongoing Reality Labs losses. Viewed over a full-year horizon, however, some reports have shown Meta significantly outperforming Alphabet, while other periods have shown the reverse, underscoring how sensitive the comparison is to the specific timeframe being measured.

Beyond its core advertising and cloud businesses, Alphabet has continued to diversify its revenue base. YouTube’s annual revenue has surpassed $60 billion when combining advertising and subscription revenue, while total paid subscriptions across Google One and YouTube Premium have topped 325 million. Alphabet’s autonomous vehicle unit, Waymo, has also expanded rapidly, reportedly surpassing 500,000 autonomous rides per week and receiving a $16 billion investment round earlier in 2026. Meta, by contrast, has continued to concentrate its strategy around advertising and consumer AI hardware, disclosing plans this year to explore monetizing its computing infrastructure through a potential cloud offering, a move that, if it materializes, could shift how investors evaluate the company’s heavy capital spending going forward.

Both companies continue to face regulatory scrutiny, including ongoing antitrust considerations tied to Alphabet’s search and cloud businesses, as well as European regulatory pressure on personalized advertising and pending U.S. litigation involving youth safety that is scheduled to proceed through parts of 2026 and could affect Meta’s platforms.

Taken together, the comparison between Meta and Alphabet in 2026 largely comes down to differing investment theses rather than a clear consensus favorite. Meta offers investors a more concentrated bet on advertising efficiency gains driven by AI, paired with a comparatively higher potential upside reflected in analyst price targets, but with continued uncertainty tied to Reality Labs losses and elevated capital spending. Alphabet offers a more diversified revenue base across search, cloud, YouTube and emerging businesses such as Waymo, along with a cloud segment that has demonstrated some of the fastest growth in the sector, though at a higher absolute level of planned capital expenditure and a valuation picture analysts continue to debate. As with any investment decision, individuals are encouraged to weigh their own risk tolerance, time horizon and portfolio diversification needs, and to consult a financial advisor before making decisions based on any single comparison of these two companies.

According to the filing with the exchange, the company is on track to deliver revenue exceeding Rs 150 crore in the first quarter of FY27, marking one of the strongest quarterly performances in its history.

Cupid said that, driven by this exceptional start to the financial year and improved visibility across international & domestic markets, the management has revised its FY27 revenue outlook upward by a minimum of 10%, which means that the company expects FY27 revenue of more than Rs 660 crore, up from its earlier guidance of Rs 600 crore.

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The revised outlook reflects growing confidence in the company’s diversified business model, expanding global opportunity pipeline and increasing operating scale across multiple business verticals.

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According to the company, growth is expected to be supported by expanding opportunities in international B2B healthcare markets, driven by demand from institutional buyers, private sector customers and government procurement programmes.
This outlook is further supported by the commencement of its long-term supply agreement with the Partnership for Supply Chain Management (PFSCM), Netherlands, which the company said strengthens its position in global healthcare procurement.The company also highlighted growing opportunities in its lubricant portfolio, driven by increasing acceptance across institutional and consumer channels. It said its consumer business offers significant long-term potential as it continues to expand its personal care and wellness brand across modern trade, organised retail and pharmacy networks across Bharat.

Cupid said it sees strong order visibility across private markets, institutional business and international tenders spanning multiple geographies. It expects sustained growth in its male and female condom businesses, driven by expanded manufacturing capacity, new customer additions and a broader market reach built over the past 12 months.

The company also said it is making steady progress in its In Vitro Diagnostics (IVD) business. While near-term growth expectations remain conservative, it expects the segment to become a meaningful contributor over the coming years, supported by regulatory approvals, new product launches and continued commercialisation efforts.

“Our strong start to FY27 reflects the transformation Cupid has undergone over the past few years. We have built a diversified business with multiple growth engines that are now beginning to scale together,” said Aditya Kumar Halwasiya, Chairman and Managing Director, Cupid.

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Halwasiya further said, “We are seeing strong momentum across our international B2B business, supported by expanding opportunities in private markets, institutional procurement, and government tenders across the world. Our strategic relationship with PFSCM has commenced on a very encouraging note and further strengthens our long-term position in global healthcare procurement.”

He added that, backed by a strong order book, improving visibility across international markets and a robust pipeline of opportunities, the company has revised its medium-term revenue outlook upward. “At the same time, we believe our projections remain conservative, leaving room for additional upside as execution continues and new opportunities materialise,” he said.

In the last two weeks, the shares of Cupid were up 16.14% and by over 52% in the last month.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)