Alicon operating cash flow falls 60% as working capital rises

Alicon Castalloy Limited reported operating cash flow of Rs 46.36 crore for the half year ended September 30, 2026, down 60% from Rs 116.46 crore a year earlier, despite profit before tax increasing to Rs 42.13 crore. Higher trade receivables, inventories and other current assets reduced cash generated from operations.

Why did Alicon’s operating cash flow decline?

Alicon’s operating cash flow declined because working-capital changes reduced cash generated from operations to Rs 55.54 crore in the half year ended September 30, 2026, from Rs 125.39 crore in the corresponding 2025 period. After net income tax paid of Rs 9.18 crore, compared with Rs 8.92 crore a year earlier, net cash from operating activities was Rs 46.36 crore.

Trade receivables were the largest cash-use item, absorbing Rs 87.95 crore in the 2026 half year after releasing Rs 18.40 crore in the prior-year period. Inventories used Rs 31.53 crore, compared with Rs 13.70 crore a year earlier, while other current assets used Rs 18.13 crore after releasing Rs 10.96 crore in the comparable half.

The fall in operating cash flow did not result from a lower pre-working-capital measure. Operating profit before working-capital changes increased by Rs 25.67 crore to Rs 122.71 crore, with depreciation and amortisation adjustments of Rs 56.94 crore and finance-cost adjustments of Rs 19.18 crore. The reduction occurred after movements in assets and liabilities were included.

How did Alicon’s working-capital balances change?

Alicon’s trade receivables stood at Rs 629.72 crore at September 30, 2026, compared with Rs 534.68 crore at March 31, 2026. Inventories rose to Rs 191.95 crore from Rs 160.94 crore, while other current assets increased to Rs 52.59 crore from Rs 35.87 crore.

The balance-sheet movements differ from the cash-flow movements, which reported Rs 87.95 crore used by receivables, Rs 31.53 crore used by inventories and Rs 18.13 crore used by other current assets. The filing reports both measures but does not provide a customer, geography or product-level split for these changes.

Trade payables partly offset the asset-related cash use, increasing by Rs 64.74 crore in the cash-flow statement, while current other financial liabilities increased by Rs 12.20 crore. At September 30, amounts due to trade creditors other than micro and small enterprises were Rs 416.56 crore, up from Rs 328.62 crore at March 31.

Cash and cash equivalents nevertheless rose to Rs 23.84 crore at September 30 from Rs 18.81 crore at the March year-end. The increase followed Rs 46.36 crore of operating cash generation, a Rs 25.33 crore investing outflow, a Rs 16.00 crore financing outflow and a Rs 0.01 crore foreign-exchange movement.

Did Alicon’s revenue and profit rise in the first half?

Alicon’s revenue and profit rose during the first half even as operating cash flow declined. Revenue from operations reached Rs 1,227.85 crore for the half year ended September 30, 2026, compared with Rs 849.03 crore in the half year ended September 30, 2025, while net profit increased to Rs 29.05 crore from Rs 23.20 crore.

Profit before tax rose to Rs 42.13 crore from Rs 31.61 crore, while total income increased to Rs 1,231.05 crore from Rs 854.80 crore. Total expenses were Rs 1,188.92 crore, compared with Rs 820.63 crore, including material-consumption expense of Rs 765.86 crore against Rs 450.98 crore and other expenses of Rs 250.27 crore against Rs 192.92 crore.

The difference between earnings and cash flow is shown by the operating bridge. Depreciation and amortisation, a non-cash adjustment, increased to Rs 56.94 crore from Rs 51.52 crore, but the larger working-capital use reduced cash generated from operations. Finance costs in the consolidated profit statement fell to Rs 21.53 crore from Rs 22.54 crore.

Alicon operates in one reported segment, aluminium alloy castings. September-quarter revenue from operations was Rs 649.84 crore, compared with Rs 578.01 crore in the June 2026 quarter and Rs 429.92 crore in the September 2025 quarter; the filing provides no segment-level explanation for the receivables or inventory increase.

What were Alicon’s investing and financing cash flows?

Alicon used Rs 25.33 crore in investing activities in the half year ended September 30, 2026, compared with Rs 56.17 crore used a year earlier. The cash-flow statement reported capital expenditure on property, plant, equipment and intangible assets of Rs 25.61 crore, interest received of Rs 0.78 crore and rent received of Rs 1.31 crore.

Alicon used Rs 16.00 crore in financing activities, compared with Rs 57.59 crore in the prior-year half. Net long-term borrowing repayment was Rs 12.13 crore, while net short-term borrowings increased by Rs 34.22 crore after a Rs 5.90 crore repayment in the corresponding 2025 period.

The group paid Rs 8.19 crore in dividends and Rs 7.24 crore towards the principal portion of lease liabilities during the 2026 half year. Non-current borrowings fell to Rs 90.13 crore at September 30 from Rs 102.26 crore at March 31, while current borrowings rose to Rs 256.81 crore from Rs 222.78 crore.

Lease liabilities, including current and non-current amounts, were Rs 64.85 crore at September 30, compared with Rs 29.36 crore at March 31. The filing also reported a Rs 12.20 crore increase in current other financial liabilities in the operating cash-flow statement, alongside the change in borrowings and lease obligations.

Conclusion

Alicon’s first-half figures show that higher revenue of Rs 1,227.85 crore and net profit of Rs 29.05 crore did not translate into higher operating cash flow. Receivables, inventory and other current assets absorbed cash, while higher trade payables provided only a partial offset, leaving operating cash flow at Rs 46.36 crore.

The next disclosed matter to watch is management’s assessment of rules issued under the Labour Codes by the Central Government on May 9, 2026. Alicon said it will account for any resulting impact after completing that assessment; it had previously recorded Rs 50.01 crore for gratuity and compensated absences as an exceptional item in the quarter and period ended December 31, 2025.