Berger Paints operating cash flow falls 78% in first half

Berger Paints India Limited generated Rs 141.40 crore of net operating cash flow in the six months ended September 30, 2026, down 78% from Rs 647.07 crore a year earlier. Berger Paints reported a Rs 478.42 crore inventory outflow and a Rs 363.41 crore rise in trade receivables, despite net profit increasing 19.3% to Rs 622.11 crore.

Why did Berger Paints' operating cash flow fall in the first half?

Berger Paints' operating cash flow fell because working-capital movements reduced cash generated from operations to Rs 322.56 crore, from Rs 798.87 crore in the six months ended September 30, 2025. This occurred even as operating profit before working-capital changes increased to Rs 1,013.07 crore from Rs 909.99 crore.

The largest change was in inventories, whose cash-flow effect swung to an outflow of Rs 478.42 crore in the 2026 first half from an inflow of Rs 116.61 crore in the prior-year period. Trade receivables used Rs 363.41 crore, compared with Rs 320.03 crore a year earlier, while other assets used a further Rs 57.30 crore.

Direct taxes paid, net of refunds, increased to Rs 181.16 crore from Rs 151.80 crore. After those tax payments, net cash from operating activities was Rs 141.40 crore, or Rs 505.67 crore below the Rs 647.07 crore reported in the prior-year period.

How did inventory and receivables affect Berger Paints' cash position?

Berger Paints ended September 30, 2026 with inventories of Rs 2,871.65 crore, up Rs 478.42 crore from Rs 2,393.23 crore at March 31, 2026. The balance-sheet increase was equal to the inventory outflow reported in the consolidated cash-flow statement for the six-month period.

Trade receivables rose to Rs 1,918.10 crore at September 30, 2026 from Rs 1,565.22 crore at March 31, an increase of Rs 352.88 crore. The cash-flow statement separately recorded a Rs 363.41 crore increase in trade receivables during the six months ended September 30, 2026.

Trade payables partly offset the inventory and receivable outflows, contributing Rs 240.17 crore of cash in the six months ended September 30, 2026, against an Rs 85.26 crore outflow in the preceding year. Current trade payables rose to Rs 1,985.90 crore at September 30 from Rs 1,745.03 crore at March 31, including Rs 122.65 crore owed to micro enterprises and small enterprises.

Other working-capital lines provided smaller offsets. Deposits and other financial assets generated Rs 44.44 crore, while other financial liabilities used Rs 48.78 crore and provisions used Rs 29.78 crore. Other liabilities contributed Rs 2.57 crore, compared with Rs 199.98 crore in the previous first half.

Did Berger Paints' profit growth translate into cash generation?

Berger Paints reported higher profit but lower operating cash flow in the six months ended September 30, 2026. Consolidated net profit rose to Rs 622.11 crore from Rs 521.42 crore, while revenue from operations increased 12.5% to Rs 6,784.12 crore from Rs 6,028.25 crore.

Profit before tax increased to Rs 827.91 crore from Rs 697.38 crore. The prior-year period included an exceptional item of Rs 36.81 crore related to a warehouse fire, whereas the six months ended September 30, 2026 did not report an exceptional item.

The reconciliation from profit to cash flow included Rs 211.64 crore of depreciation and amortisation, up from Rs 191.03 crore. Berger Paints also deducted Rs 19.82 crore for its share of joint-venture profit, Rs 22.71 crore of net gains on sales of mutual-fund investments measured at fair value through profit or loss, and Rs 15.92 crore of fair-value gains on those investments.

On a simple comparison of the reported figures, net operating cash flow was about 23% of net profit in the 2026 first half, compared with about 124% in the 2025 period. The change followed the shift in inventory from a Rs 116.61 crore source of cash to a Rs 478.42 crore use of cash.

How did Berger Paints fund its cash needs in the first half?

Berger Paints increased net short-term borrowings by Rs 433.93 crore during the six months ended September 30, 2026. It drew Rs 1,641.38 crore of short-term borrowings and repaid Rs 1,207.45 crore, compared with net short-term borrowing of Rs 45.56 crore in the year-earlier period.

Current borrowings stood at Rs 557.79 crore at September 30, 2026, substantially above Rs 126.53 crore at March 31, 2026. Non-current borrowings were Rs 16.79 crore, compared with Rs 15.71 crore at the March year-end, while Berger Paints repaid Rs 1.23 crore of long-term borrowings during the half year.

Financing activities used Rs 466.41 crore, versus Rs 443.04 crore a year earlier. The 2026 outflow included Rs 110.28 crore of dividends paid, Rs 49.60 crore of lease-principal payments, Rs 17.10 crore of lease-interest payments and Rs 9.50 crore of interest paid.

Investing activities used Rs 109.84 crore, less than the Rs 168.81 crore used in the prior-year first half. Purchases of property, plant and equipment and intangible assets were Rs 222.96 crore, up from Rs 191.32 crore, while current-investment sales and purchases produced a net Rs 97.44 crore cash inflow.

What changed in Berger Paints' cash and balance sheet?

Berger Paints' cash and cash equivalents declined by Rs 78.64 crore to Rs 128.60 crore at September 30, 2026 from Rs 207.24 crore at March 31, 2026. The cash-flow statement reported a Rs 78.72 crore net decrease before a Rs 8 lakh exchange-rate effect, reconciling to the period-end cash balance.

Current investments were Rs 894.73 crore at September 30, down from Rs 953.54 crore at March 31. Bank balances other than cash and cash equivalents were Rs 91.90 crore, compared with Rs 98.07 crore, while current assets increased to Rs 6,184.37 crore from Rs 5,427.10 crore, led by inventories and receivables.

Total equity rose to Rs 7,092.55 crore from Rs 6,929.90 crore, while total liabilities increased to Rs 3,723.60 crore from Rs 3,127.36 crore. The liabilities increase included a Rs 431.26 crore rise in current borrowings and a Rs 240.87 crore increase in trade payables.

Conclusion

Berger Paints recorded higher first-half revenue, profit before tax and net profit in the six months ended September 30, 2026, but inventory and receivable movements reduced net operating cash flow to Rs 141.40 crore. Higher trade payables partly offset the working-capital outflow, while current borrowings rose to Rs 557.79 crore and cash and cash equivalents fell to Rs 128.60 crore.

Management said raw-material inflation affected operating-profit growth in the September quarter and that it would implement further price increases in November and beyond when required, alongside cost-efficiency initiatives. The next reported period will show the effect of those measures on margins as well as on inventory, receivables and operating cash generation.