Ambica Agarbathies reports Rs 3.58 crore operating outflow

Ambica Agarbathies Aroma & Industries Limited reported a Rs 3.58 crore cash outflow from operating activities for the half year ended 30 September 2026, despite profit after tax of Rs 2.17 crore. A Rs 9.81 crore increase in trade receivables and a Rs 3.84 crore increase in other current assets outweighed operating profit and liability-related cash inflows.

Why did Ambica Agarbathies report an operating cash outflow?

Ambica Agarbathies reported net cash used in operating activities of Rs 3.58 crore for the half year ended 30 September 2026, against cash generated of Rs 8.02 crore in the corresponding 2025 half year. The movement between the two periods was Rs 11.60 crore, even as the company recorded Rs 6.17 crore of operating profit before working-capital changes in the latest half year.

Working-capital movements caused the outflow. Trade receivables absorbed Rs 9.81 crore, compared with a Rs 12.66 lakh cash inflow from receivables in the prior-year half year. Other current assets absorbed Rs 3.84 crore, reversing a Rs 69.51 lakh inflow a year earlier. Inventories used Rs 8.42 lakh, although that was lower than the Rs 1.20 crore cash absorption reported for inventories in the comparable period.

Trade payables and other liabilities partly countered these movements. Trade payables generated Rs 61.33 lakh in the September 2026 half year, compared with a Rs 3.26 crore outflow in the September 2025 half year. Other financial liabilities and other current liabilities generated Rs 4.05 crore, compared with a Rs 18.54 lakh outflow a year earlier. Cash generated from operations was therefore negative Rs 2.90 crore, and income-tax payments of Rs 68.76 lakh took net operating cash flow to negative Rs 3.58 crore.

How did Ambica Agarbathies profit compare with cash flow?

Ambica Agarbathies remained profitable during the half year, reporting profit after tax of Rs 2.17 crore for the period ended 30 September 2026, compared with Rs 2.07 crore in the prior-year half year. Profit before tax increased to Rs 2.90 crore from Rs 2.76 crore, but the cash-flow statement shows that increased receivables and other current assets prevented those earnings from converting into positive operating cash.

Total income was Rs 69.24 crore in the latest half year, up from Rs 68.65 crore in the corresponding 2025 period. The agarbathies division generated Rs 51.81 crore of revenue, marginally below Rs 51.90 crore a year earlier. Hotel-division revenue rose to Rs 17.43 crore from Rs 16.76 crore, providing the increase in total income despite the slight decline in agarbathies revenue.

The segment split also shows different profit contributions. The agarbathies division reported a pre-tax segment profit of Rs 4.01 crore, compared with Rs 2.98 crore in the prior-year half year. The hotel division reported a pre-tax segment loss of Rs 1.11 crore, compared with a Rs 21.89 lakh loss a year earlier. Together, the two segments produced total pre-tax profit of Rs 2.90 crore.

What happened to Ambica Agarbathies receivables and current assets?

Ambica Agarbathies' trade receivables rose to Rs 33.42 crore at 30 September 2026 from Rs 23.61 crore at 31 March 2026. The Rs 9.81 crore increase corresponds with the receivables movement presented in the half-year cash-flow statement. It was the largest individual cash use among the listed working-capital items for the September 2026 period.

Total current assets increased to Rs 114.74 crore at 30 September 2026 from Rs 100.82 crore at 31 March 2026, an increase of Rs 13.91 crore. Inventories increased to Rs 5.37 crore from Rs 5.29 crore. Cash and cash equivalents were Rs 46.20 lakh at the half-year end, compared with Rs 28.35 lakh at the beginning of the financial year.

The cash-flow statement records a Rs 17.86 lakh net increase in cash and cash equivalents during the half year, taking the reported closing balance to Rs 46.21 lakh. The balance-sheet presentation shows Rs 46.20 lakh, a Rs 1 difference from the cash-flow statement. The filing does not explain this difference, which is immaterial relative to the Rs 33.42 crore receivables balance.

How did Ambica Agarbathies fund its cash movements?

Ambica Agarbathies recorded a Rs 18.34 lakh net inflow from financing activities in the half year ended 30 September 2026, compared with a Rs 4.96 crore financing outflow in the corresponding 2025 half year. Changes in borrowings provided Rs 6.57 crore, compared with Rs 1.50 crore in the prior-year period. The cash-flow statement does not specify the use of the additional borrowings.

Financing cash inflows were offset by Rs 6.22 crore of interest paid, Rs 1.92 crore used in changes in other non-current assets and Rs 46.04 lakh used in changes in investments. Changes in share capital and share application money provided Rs 2.12 crore, while changes in lease liabilities provided Rs 8.92 lakh. Current borrowings stood at Rs 26.80 crore at 30 September 2026, up from Rs 20.17 crore at 31 March 2026.

Investing activities generated Rs 3.58 crore in the latest half year, compared with a Rs 3.37 crore outflow in the prior-year period. The statement lists Rs 3.75 crore of interest income and Rs 17.33 lakh of fixed-asset and capital-work-in-progress purchases. The Rs 3.58 crore investing inflow and Rs 18.34 lakh financing inflow broadly offset the Rs 3.58 crore operating outflow, leaving the Rs 17.86 lakh rise in cash.

Conclusion

Ambica Agarbathies' September 2026 half-year filing shows a contrast between reported earnings and operating cash generation. Profit after tax increased to Rs 2.17 crore from Rs 2.07 crore, while operating cash flow moved from a Rs 8.02 crore inflow to a Rs 3.58 crore outflow. The primary reason disclosed was the Rs 9.81 crore rise in trade receivables, alongside Rs 3.84 crore absorbed by other current assets.

The next point to watch is whether the Rs 33.42 crore receivables balance reduces and whether operating cash flow follows that movement. The filing also shows Rs 6.57 crore of cash from changes in borrowings and current borrowings of Rs 26.80 crore at 30 September 2026, making subsequent changes in receivables, interest paid and borrowing levels relevant to the company’s cash position.