Aarti Drugs operating cash flow falls to Rs 33.93 crore

Aarti Drugs Limited reported standalone net cash from operating activities of Rs 33.93 crore for the half year ended September 30, 2026, down from Rs 149.92 crore a year earlier, after cash generated from operations fell to Rs 56.20 crore and direct taxes of Rs 22.27 crore were paid.

Why did Aarti Drugs’ operating cash flow fall?

Aarti Drugs’ operating cash flow fell because cash generated from operations before direct taxes declined to Rs 56.20 crore in the six months to September 30, 2026, from Rs 148.24 crore in the corresponding prior-year period. Net cash from operating activities was Rs 33.93 crore after direct taxes paid of Rs 22.27 crore, compared with Rs 149.92 crore a year earlier.

The prior-year tax line was a net refund received of Rs 1.68 crore, whereas the latest half-year statement records an outflow for direct taxes. This change reduced the cash retained from operations in addition to the lower cash generated before taxes.

The cash-flow statement is standalone, while Aarti Drugs also reported consolidated results for the September 2026 quarter and half year. The standalone profit after tax nevertheless increased to Rs 108.53 crore in the latest half year from Rs 90.42 crore in the comparable period, showing that profit and operating cash moved in different directions.

How much did inventory and receivables rise at Aarti Drugs?

Aarti Drugs’ standalone inventories increased by Rs 90.72 crore to Rs 496.07 crore at September 30, 2026, from Rs 405.35 crore at March 31, 2026. Standalone trade receivables rose by Rs 68.30 crore over the same six months to Rs 800.71 crore from Rs 732.41 crore.

The rise in both current-asset balances coincided with the fall in cash generated from operations to Rs 56.20 crore. Higher inventories represent more materials or goods held at the reporting date, while higher receivables represent more amounts due from customers, tying up funds in working capital.

Other current assets moved in the opposite direction, falling by Rs 3.17 crore between March 31 and September 30, 2026. The cash-flow statement also includes other financial assets, trade payables, other financial liabilities, employee benefits and provisions in its working-capital movements, but the filing does not quantify the full cash-flow effect of each balance-sheet category separately.

Did Aarti Drugs’ higher profit turn into higher operating cash?

No. Aarti Drugs’ standalone profit after tax rose by Rs 18.11 crore year on year to Rs 108.53 crore for the half year ended September 30, 2026, while net cash from operating activities declined by Rs 115.99 crore to Rs 33.93 crore.

The statement begins with profit before tax and adjusts for items including depreciation and amortisation, interest, investment write-offs and capital-expenditure write-offs before recording working-capital movements. Aarti Drugs disclosed an exceptional write-off of Rs 2.09 crore of capital work-in-progress, or CWIP, related to an administrative building at E1 in the financial-results notes.

Standalone total current assets increased to Rs 1,368.52 crore at September 30, 2026, from Rs 1,212.67 crore at March 31, 2026. Cash and cash equivalents increased only Rs 0.15 crore to Rs 3.72 crore during the half year, despite the increase in reported profit.

What happened to Aarti Drugs’ investing and financing cash flows?

Aarti Drugs recorded net investing cash outflows of Rs 49.36 crore in the half year ended September 30, 2026, compared with Rs 63.80 crore in the prior-year half. Purchases of property, plant and equipment, including CWIP, accounted for Rs 49.30 crore of the latest investing outflow, against Rs 53.99 crore a year earlier.

Property, plant and equipment on the standalone balance sheet increased to Rs 996.37 crore at September 30 from Rs 970.10 crore at March 31, 2026. CWIP declined to Rs 98.25 crore from Rs 106.20 crore over the same period, alongside the disclosed Rs 2.09 crore CWIP write-off.

Financing activities generated net cash of Rs 15.58 crore in the latest half year, compared with a net outflow of Rs 87.23 crore a year earlier. Combined with Rs 33.93 crore from operations and Rs 49.36 crore used in investing, this resulted in a Rs 0.15 crore increase in cash and cash equivalents from Rs 3.57 crore at the beginning of the period to Rs 3.72 crore at September 30, 2026.

Conclusion

Aarti Drugs’ September 2026 half-year filing shows a divergence between earnings and cash generation. Standalone profit after tax increased to Rs 108.53 crore, but net operating cash fell to Rs 33.93 crore as inventories rose Rs 90.72 crore and trade receivables increased Rs 68.30 crore from March 31, 2026.

The filing identifies routine expansion plans in the context of the Rs 2.09 crore CWIP write-off. Subsequent disclosures will show whether inventory and receivable balances moderate, whether operating cash recovers, and how further spending on property, plant and equipment and CWIP affects cash flows.