Astral reports Rs 68 crore operating cash outflow in half year

Astral Limited reported a Rs 68 crore net operating cash outflow in the half year ended September 30, 2026, despite net profit rising to Rs 247.5 crore from Rs 214 crore a year earlier. A Rs 306.3 crore inventory increase, a Rs 213.2 crore working-capital outflow from liabilities and Rs 101.9 crore of tax payments absorbed cash.

Why did Astral report negative operating cash flow?

Astral reported negative operating cash flow because working-capital movements reduced cash generated from operations to Rs 33.9 crore in the half year ended September 30, 2026, from Rs 470.5 crore in the corresponding prior-year period. After Rs 101.9 crore of income-tax payments net of refunds, operating cash flow was a Rs 68 crore outflow, compared with a Rs 388.8 crore inflow a year earlier.

The largest identified use of working capital was a Rs 306.3 crore increase in inventories, compared with a Rs 48.3 crore increase in the half year ended September 30, 2025. Trade receivables, financial assets and other assets released Rs 53.2 crore of cash, versus Rs 38.9 crore in the prior-year period, but this did not offset inventory and liability movements.

Astral also reported a Rs 213.2 crore outflow under trade payables, financial liabilities, other liabilities and provisions, against a Rs 7.7 crore inflow in the comparable period. Operating profit before working-capital changes increased to Rs 500.2 crore from Rs 472.2 crore, showing that the move to negative operating cash flow occurred after working-capital changes and tax payments.

How much did Astral's inventory and cash position change?

Astral's inventories rose to Rs 1,425.6 crore at September 30, 2026, from Rs 1,117.3 crore at March 31, 2026, an increase of Rs 308.3 crore on the balance sheet. The cash-flow statement records a Rs 306.3 crore increase in inventories for the half year, while the balance sheet presents the period-end inventory balance.

Cash and cash equivalents fell to Rs 405.3 crore at September 30, 2026, from Rs 890.4 crore at March 31, 2026. The Rs 485.1 crore decline matched the reported net decrease in cash and cash equivalents during the half year and was larger than the Rs 59.4 crore fall reported in the corresponding prior-year period.

Trade receivables declined to Rs 392.5 crore from Rs 475.1 crore over the six months. Trade payables to creditors other than micro and small enterprises fell to Rs 918 crore from Rs 1,121.1 crore, while dues to micro and small enterprises rose to Rs 42.1 crore from Rs 34.2 crore.

Did Astral's higher profit translate into operating cash generation?

No, Astral's higher reported profit did not translate into positive operating cash generation in the first half because working capital and taxes absorbed more cash than operations generated before those items. Net profit increased by Rs 33.5 crore year on year to Rs 247.5 crore, while operating cash flow moved by Rs 456.8 crore from a Rs 388.8 crore inflow to a Rs 68 crore outflow.

Revenue from operations rose to Rs 3,566.3 crore in the half year ended September 30, 2026, from Rs 2,938.6 crore a year earlier. Profit before exceptional items and tax increased to Rs 344.2 crore from Rs 289.7 crore, while reported profit before tax was Rs 334.7 crore after a Rs 9.5 crore exceptional item.

The filing identifies that exceptional item as goodwill impairment at Seal It Services Inc., USA. Astral recorded Rs 154.1 crore of depreciation and amortisation and Rs 18 crore of finance costs in the half year, compared with Rs 144.2 crore and Rs 28.3 crore respectively in the prior-year period.

Which business segments grew while cash flow weakened?

Astral's Plumbing segment generated Rs 2,448.8 crore of first-half revenue, up from Rs 2,072.5 crore a year earlier, and its segment result increased to Rs 314.8 crore from Rs 256 crore. The segment includes pipes and fittings, water tanks and bathware, according to the filing.

Paints and Adhesives revenue increased to Rs 1,117.5 crore from Rs 866.1 crore, but its segment result declined to Rs 35.1 crore from Rs 50.9 crore. The two segments together generated Rs 3,566.3 crore of revenue, while the filing does not allocate the consolidated Rs 306.3 crore inventory cash outflow between them.

Segment assets in Plumbing stood at Rs 3,414.6 crore at September 30, 2026, compared with Rs 3,177 crore at March 31, 2026. Paints and Adhesives assets increased to Rs 1,956.7 crore from Rs 1,675.9 crore, while total segment liabilities declined to Rs 1,331.9 crore from Rs 1,504.6 crore.

What other cash uses reduced Astral's cash balance?

Astral used Rs 348 crore in investing activities during the half year ended September 30, 2026, compared with Rs 246.1 crore in the same period a year earlier. The largest outflow was Rs 318.4 crore for property, plant and equipment and intangible assets, including capital advances and capital creditors, up from Rs 224.9 crore in the prior-year period.

The group also recorded a Rs 39.1 crore payment for acquiring control in a subsidiary. The notes state that Astral Chemie Limited entered definitive agreements on June 11, 2026, to acquire a 60% partnership interest in Differentiated & Sustainable Solutions LLP, with an upfront payment of Rs 39.1 crore; the acquisition accounting is provisional under Indian Accounting Standard 103, Business Combinations.

Financing activities used a further Rs 69.1 crore, compared with a Rs 202.1 crore outflow a year earlier. This included Rs 67.1 crore of dividend payments, Rs 14.3 crore of finance costs paid and Rs 22.1 crore of lease-liability payments including interest, partly offset by Rs 37.1 crore of long-term borrowing proceeds and Rs 11.5 crore of net short-term borrowing proceeds.

Current borrowings increased to Rs 112.6 crore at September 30, 2026, from Rs 70.1 crore at March 31, 2026, while non-current borrowings were Rs 85.8 crore versus Rs 83 crore. Total liabilities nevertheless declined to Rs 1,631.3 crore from Rs 1,754 crore, alongside the fall in trade payables and other liability categories.

Conclusion

Astral's September 2026 half-year results show a contrast between reported earnings and cash conversion. Revenue rose by Rs 627.7 crore and net profit increased by Rs 33.5 crore year on year, but the Rs 306.3 crore inventory movement, Rs 213.2 crore liability-related outflow and Rs 101.9 crore of tax payments resulted in a Rs 68 crore operating cash outflow.

The next reporting period will show whether the Rs 1,425.6 crore inventory balance at September 30, 2026 is reduced and operating cash flow changes direction. It will also provide further information on the provisional accounting for the Rs 39.1 crore upfront payment for the 60% interest in Differentiated & Sustainable Solutions LLP, while the board has approved an interim dividend of Rs 1.50 per share.