Baroda Rayon funds Rs 25.37 crore operating cash outflow

The Baroda Rayon Corporation Limited funded a Rs 25.37 crore operating cash outflow in the half year ended September 30, 2026 with a Rs 36.22 crore net financing inflow, lifting cash and cash equivalents to Rs 2.18 crore from Rs 9.01 lakh at March 31, 2026. Inventory and other-asset additions absorbed cash despite Rs 24.58 crore of operating profit before working-capital changes.

Why did Baroda Rayon report an operating cash outflow?

Baroda Rayon reported net cash used in operating activities of Rs 25.37 crore for the half year ended September 30, 2026 because working-capital movements absorbed Rs 49.95 crore, exceeding the Rs 24.58 crore operating profit before those movements. The cash-flow statement recorded profit before tax of Rs 23.91 crore, depreciation and amortisation of Rs 13.59 lakh, and finance costs of Rs 53.75 lakh.

The largest working-capital cash use was a Rs 21.37 crore increase in inventories. Other current assets used Rs 16.99 crore and other non-current assets used Rs 11.40 crore. A Rs 1.40 crore reduction in trade receivables and a Rs 1.05 crore increase in trade payables partly offset those movements, while other current liabilities reduced cash by Rs 2.65 crore.

The disclosed comparison is between the September 2026 half year and the full year ended March 31, 2026, so the periods are not like-for-like. The full year recorded a Rs 3.97 crore operating outflow, compared with Rs 25.37 crore in the latest six months. The latest period included inventory, other-current-asset and other-non-current-asset cash uses totalling Rs 49.77 crore.

How did Baroda Rayon fund its cash requirement?

Baroda Rayon generated a net Rs 36.22 crore from financing activities in the half year ended September 30, 2026, exceeding its combined operating and investing cash outflows of Rs 34.13 crore. Long-term borrowing proceeds were Rs 66.05 crore, while long-term borrowing repayments were Rs 29.29 crore and finance costs paid were Rs 53.75 lakh.

Investing activities used Rs 8.76 crore during the September 2026 half year. The principal item was Rs 9.18 crore spent on mutual-fund purchases, partly offset by Rs 45.02 lakh of investment-sale proceeds. The cash-flow statement also reported Rs 2.73 lakh spent on fixed-asset purchases.

The financing inflow, after the operating and investing outflows, resulted in a Rs 2.09 crore net increase in cash and cash equivalents. Cash increased to Rs 2.18 crore at September 30, 2026 from Rs 9.01 lakh at the beginning of the financial year. In the year ended March 31, 2026, cash had declined by Rs 77.12 lakh from an opening balance of Rs 86.13 lakh to Rs 9.01 lakh.

How much did Baroda Rayon's borrowings increase?

Baroda Rayon's total reported borrowings increased by Rs 36.76 crore to Rs 213.04 crore at September 30, 2026 from Rs 176.28 crore at March 31, 2026. Non-current borrowings rose by Rs 34.51 crore to Rs 171.83 crore, while current borrowings increased by Rs 2.25 crore to Rs 41.21 crore.

The Rs 36.76 crore increase in balance-sheet borrowings differs from the Rs 36.22 crore financing cash inflow because the statements capture different measures. The cash-flow statement records borrowing proceeds, repayments and finance costs during the period, while the balance sheet records borrowings outstanding at September 30, 2026 and March 31, 2026. The filing does not identify lenders or provide a maturity schedule for the Rs 171.83 crore non-current borrowing balance.

Total equity increased to Rs 413.62 crore at September 30, 2026 from Rs 394.51 crore at March 31, 2026. Other equity rose to Rs 390.71 crore from Rs 371.60 crore, while equity share capital was unchanged at Rs 22.91 crore. Total liabilities were Rs 377.74 crore at the half-year date, compared with Rs 337.78 crore at March 31, 2026.

Which balance-sheet items drove Baroda Rayon's cash use?

Baroda Rayon's inventory balance reached Rs 663.61 crore at September 30, 2026, compared with Rs 642.23 crore at March 31, 2026. That Rs 21.37 crore increase corresponds to the inventory cash outflow reported in the half-year cash-flow statement. Inventory was the largest single working-capital use in a period that produced a Rs 25.37 crore operating cash outflow.

Other current assets rose to Rs 45.74 crore at September 30, 2026 from Rs 28.75 crore at March 31, 2026, while other non-current assets rose to Rs 26.66 crore from Rs 15.26 crore. Trade receivables moved in the other direction, declining to Rs 7.74 crore from Rs 9.15 crore. Trade payables increased to Rs 10.70 crore from Rs 9.65 crore.

Total assets increased to Rs 791.36 crore at September 30, 2026 from Rs 732.29 crore at March 31, 2026. The real-estate segment accounted for Rs 767.47 crore of assets and the textile segment accounted for Rs 23.88 crore. Baroda Rayon stated that textile operations have been at a standstill since August 2008 and that it is seeking new avenues to restart the segment.

How did Baroda Rayon's segments perform in the September 2026 half year?

Baroda Rayon's real-estate segment reported Rs 33.89 crore of revenue for the half year ended September 30, 2026, compared with Rs 2.08 crore from textiles. Real estate therefore accounted for most of the reported Rs 35.98 crore total revenue, which included other income under the financial-results presentation.

Real-estate segment results before unallocable finance costs, exceptional items and tax were Rs 10.36 crore in the September 2026 half year, compared with Rs 2.08 crore for textiles. Total segment results were Rs 12.44 crore, lower than Rs 12.55 crore in the prior-year half year. Finance costs were Rs 53.75 lakh, compared with Rs 92.08 lakh in the prior-year half year.

Net profit for the September 2026 half year was Rs 19.11 crore, compared with Rs 13.14 crore in the half year ended September 30, 2025. The latest period included a Rs 12 crore exceptional item and a Rs 4.80 crore current-tax credit. These profit measures differ from operating cash flow, which was affected by the Rs 49.95 crore working-capital cash absorption.

Conclusion

Baroda Rayon's September 2026 half-year statements show that reported profit did not translate into operating cash generation. Operating profit before working-capital changes of Rs 24.58 crore was outweighed by Rs 49.95 crore of working-capital use, producing a Rs 25.37 crore operating cash outflow. Net financing inflows of Rs 36.22 crore, supported by Rs 66.05 crore of long-term borrowing proceeds, increased cash to Rs 2.18 crore.

The next financial results will show whether inventory of Rs 663.61 crore and other current assets of Rs 45.74 crore convert into cash, and whether the Rs 213.04 crore borrowing balance changes. Baroda Rayon has also disclosed that it is seeking new avenues to restart textile operations, which have been at a standstill since August 2008.