Aries Agro operating cash flow turns negative in H1 2026

Aries Agro Limited reported a consolidated operating cash outflow of Rs 14.02 crore for the six months ended September 30, 2026, against an inflow of Rs 39.72 crore a year earlier, even as net profit increased to Rs 40.19 crore. Aries Agro’s inventory and trade-receivable increases absorbed Rs 128.08 crore of cash during the half year.

Why did Aries Agro’s operating cash flow turn negative?

Aries Agro’s consolidated net cash flow from operating activities turned to an outflow of Rs 14.02 crore in the six months ended September 30, 2026, from an inflow of Rs 39.72 crore in the corresponding 2025 period. The reversal came after cash generated from operations, before tax payments, fell to a negative Rs 0.49 crore from a positive Rs 50.54 crore.

The immediate driver was working-capital absorption rather than a fall in operating profit. Operating profit before working-capital changes rose to Rs 66.69 crore from Rs 57.86 crore, an increase of Rs 8.82 crore. However, higher inventories and receivables used more cash than the increase in this pre-working-capital operating profit.

Income taxes paid, net of refunds, were Rs 13.53 crore in the September 2026 half year, compared with Rs 10.82 crore a year earlier. This payment followed the negative Rs 0.49 crore cash generated from operations and resulted in the Rs 14.02 crore operating outflow.

The filing reports unaudited half-year financial results approved by the board on November 13, 2026. Its statutory auditor conducted a limited review and stated that nothing had come to its attention indicating that the standalone statement contained a material misstatement.

How much cash did inventories and receivables absorb?

Aries Agro’s inventories absorbed Rs 95.25 crore of cash in the six months ended September 30, 2026, compared with Rs 12.01 crore in the corresponding 2025 half year. The increase in inventory-related cash use was therefore Rs 83.24 crore year on year and was the largest working-capital movement in the consolidated cash-flow statement.

Trade receivables absorbed another Rs 32.83 crore, against Rs 22.08 crore in the previous corresponding period. Together, inventory and receivables used Rs 128.08 crore, substantially above the Rs 34.10 crore cash use recorded across those two lines in the September 2025 half year.

Aries Agro received offsetting cash flows of Rs 22.19 crore from higher trade payables and Rs 38.71 crore from provisions and other current liabilities. These two liability movements provided Rs 60.90 crore, compared with Rs 26.78 crore a year earlier, but did not cover the Rs 128.08 crore deployed into inventory and receivables.

The consolidated balance sheet shows inventories of Rs 239.14 crore at September 30, 2026, compared with Rs 143.89 crore at March 31, 2026. Trade receivables were Rs 125.13 crore at September 30, compared with Rs 92.30 crore at the preceding financial year-end, matching the movements reported in the cash-flow statement.

How did cash flow compare with Aries Agro’s profit?

Aries Agro’s consolidated net profit increased to Rs 40.19 crore for the September 2026 half year from Rs 29.85 crore in the September 2025 half year, while operating cash flow changed from a Rs 39.72 crore inflow to a Rs 14.02 crore outflow. Reported profit and operating cash therefore moved in opposite directions during the six-month period.

Profit before tax rose to Rs 53.70 crore from Rs 42.55 crore. Finance costs declined to Rs 8.83 crore from Rs 12.38 crore, while depreciation and amortisation increased to Rs 5.75 crore from Rs 5.04 crore in the consolidated cash-flow reconciliation.

The standalone statement showed the same pattern. Standalone operating cash flow was a negative Rs 13.34 crore in the six months ended September 30, 2026, versus a positive Rs 38.24 crore a year earlier; standalone inventory and receivables absorbed Rs 84.12 crore and Rs 26.04 crore, respectively.

Aries Agro reports one primary business segment, so the filing does not provide cash flow by product category or operating segment. The company states that its micronutrient fertilisers and plant nutrient solutions business is affected by cropping patterns, seasonality and erratic weather conditions globally and in India.

What happened to Aries Agro’s cash, investing and financing flows?

Aries Agro’s consolidated cash and cash equivalents declined by Rs 18.55 crore during the six months ended September 30, 2026, closing at Rs 6.21 crore compared with an opening balance of Rs 24.76 crore. The decline was larger than the Rs 11.78 crore reduction in the corresponding 2025 half year.

Investing activities generated Rs 5.20 crore of cash, compared with an outflow of Rs 55.80 crore a year earlier. The change included Rs 19.01 crore from movement in mutual funds in the 2026 half year, whereas the prior-year period recorded a Rs 36.07 crore investment in mutual funds.

Fixed assets and capital work-in-progress used Rs 9.80 crore in investing cash flow, lower than Rs 21.14 crore in the previous corresponding half year. Financing activities used Rs 9.73 crore, compared with a Rs 4.29 crore inflow, as Rs 6.85 crore of net non-current borrowings was outweighed by Rs 7.88 crore of net current-borrowing reduction and Rs 8.83 crore of finance costs.

Consolidated current borrowings were Rs 12.02 crore at September 30, 2026, down from Rs 19.90 crore at March 31, 2026. Non-current borrowings rose to Rs 37.59 crore from Rs 30.74 crore over the same period, consistent with the net Rs 6.85 crore financing cash inflow recorded under non-current borrowings.

Conclusion

Aries Agro’s half-year figures show that higher reported profit did not convert into operating cash during the six months ended September 30, 2026. Inventory and receivables absorbed Rs 128.08 crore, exceeding the Rs 60.90 crore cash contribution from payables, provisions and other current liabilities, and leaving operating cash flow at a negative Rs 14.02 crore.

The next results will indicate whether the Rs 239.14 crore inventory balance and Rs 125.13 crore receivables balance at September 30 convert into cash. Aries Agro has not disclosed a working-capital target or recovery plan, but it has said that cropping patterns, seasonality and weather conditions mean quarterly figures are not representative of full-year performance.