Centum Electronics Limited Q2 profit rises 77% as revenue gains 52%

Centum Electronics Limited reported standalone profit after tax of Rs 22.812 crore for the quarter ended September 30, 2026, up 77% from Rs 12.910 crore a year earlier, as revenue from operations rose 52% to Rs 312.057 crore. The quarter also brought higher inventories and lower first-half operating cash flow.

How did Centum Electronics perform in standalone Q2?

Centum Electronics reported revenue from operations of Rs 312.057 crore in the quarter ended September 30, 2026, compared with Rs 205.531 crore in the year-earlier quarter and Rs 204.782 crore in the quarter ended June 30, 2026. Revenue from operations included sales and income from operations of Rs 311.819 crore and other operating income of Rs 0.238 crore.

Total income reached Rs 314.383 crore in Q2, up from Rs 208.144 crore in Q2 of the previous year. Other income was Rs 1.591 crore, while finance income was Rs 0.735 crore, compared with Rs 0.264 crore and Rs 2.349 crore, respectively, a year earlier.

Profit before exceptional items and tax rose to Rs 30.733 crore from Rs 17.478 crore. Tax expense increased to Rs 7.921 crore from Rs 4.568 crore, resulting in profit after tax of Rs 22.812 crore versus Rs 12.910 crore. Basic and diluted earnings per share were Rs 15.45, compared with Rs 8.74 in Q2 of the prior year.

Which costs changed as Centum Electronics' revenue rose?

Centum Electronics recorded material consumption of Rs 212.155 crore in Q2, up from Rs 159.565 crore in the corresponding quarter of the prior year. Employee-benefit expense increased to Rs 40.462 crore from Rs 32.535 crore, while depreciation and amortisation rose to Rs 5.711 crore from Rs 5.010 crore.

Finance costs were Rs 5.454 crore, compared with Rs 4.459 crore a year earlier, and other expenses increased to Rs 24.842 crore from Rs 12.428 crore. The inventory movement was a credit of Rs 4.974 crore, lower than the credit of Rs 23.331 crore in Q2 of FY26. Total expenses rose to Rs 283.650 crore from Rs 190.666 crore.

For the six months ended September 30, 2026, material consumption was Rs 394.361 crore against Rs 285.280 crore in the prior-year half. Employee benefits rose to Rs 72.419 crore from Rs 61.824 crore, and other expenses increased to Rs 42.103 crore from Rs 28.151 crore, alongside a 32% increase in revenue from operations to Rs 516.839 crore.

What did Centum Electronics report for the first half?

Centum Electronics generated total income of Rs 521.474 crore in the six months ended September 30, 2026, compared with Rs 396.168 crore in the same period of FY26. Profit before exceptional items and tax increased to Rs 46.235 crore from Rs 38.680 crore, while profit after tax rose to Rs 36.345 crore from Rs 28.361 crore.

The half-year figures include an exceptional gain of Rs 2.752 crore recorded in the quarter ended June 30, 2026, taking reported profit before tax to Rs 48.987 crore. The company disclosed recovery of Rs 2.437 crore of trade receivables from Canadian subsidiaries and a liability write-back of Rs 0.315 crore during that quarter. There was no exceptional item in Q2.

Centum Electronics identifies Electronics System Design and Manufacturing, abbreviated as ESDM, as its only reportable segment under Indian Accounting Standard 108. The filing therefore does not provide a standalone revenue or profit split by product line, customer market or geography for the Rs 312.057 crore of Q2 revenue from operations.

Why was Centum Electronics' operating cash flow lower in the first half?

Centum Electronics reported net cash from operating activities of Rs 16.820 crore in the six months ended September 30, 2026, down from Rs 42.046 crore a year earlier, although reported profit before tax increased to Rs 48.987 crore from Rs 38.680 crore. Cash generated from operations declined to Rs 27.378 crore from Rs 48.478 crore, while direct taxes paid rose to Rs 10.558 crore from Rs 6.432 crore.

The cash-flow statement recorded an inventory cash outflow of Rs 82.753 crore, compared with an outflow of Rs 145.710 crore in the prior-year half. Trade receivables used Rs 15.023 crore, versus a cash release of Rs 38.509 crore a year earlier, and financial and other assets used Rs 13.128 crore. These movements were partly offset by Rs 63.343 crore from trade payables, provisions, financial liabilities and other liabilities.

Inventories on the balance sheet rose to Rs 538.105 crore at September 30, 2026 from Rs 456.776 crore at March 31, 2026. Trade receivables increased to Rs 317.691 crore from Rs 307.309 crore, while cash and cash equivalents fell to Rs 24.529 crore from Rs 37.752 crore.

How did Centum Electronics fund its balance sheet during the period?

Centum Electronics used Rs 24.168 crore in investing activities during the first half, compared with Rs 44.509 crore in the prior-year period. Purchases of property, plant and equipment, capital work-in-progress, intangible assets and capital advances totalled Rs 19.821 crore, while net purchases of mutual-fund investments were Rs 52.058 crore.

Redemption of bank deposits and other bank balances generated Rs 45.162 crore during the six months ended September 30, 2026. At that date, investments stood at Rs 52.856 crore, while bank balances other than cash and cash equivalents were Rs 32.437 crore, down from Rs 82.200 crore at March 31, 2026.

Financing activities produced a net outflow of Rs 4.619 crore, compared with an inflow of Rs 11.470 crore in the prior-year half. The company received Rs 25.158 crore of long-term borrowings, repaid Rs 5.573 crore, reduced short-term borrowings by Rs 7.079 crore and paid dividends of Rs 7.386 crore. Non-current borrowings rose to Rs 26.341 crore from Rs 2.235 crore, while current borrowings declined to Rs 107.201 crore from Rs 119.757 crore.

On November 4, 2026, the board approved, subject to shareholder approval, a proposal to increase the borrowing limit to Rs 1,000 crore from Rs 500 crore. The board also approved, subject to shareholder approval, the creation of mortgage, charge or hypothecation over movable and immovable assets to secure aggregate borrowings of up to Rs 1,000 crore, including existing borrowings.

Conclusion

Centum Electronics' standalone Q2 result combined 52% growth in revenue from operations with a 77% increase in profit after tax. First-half profit also increased, but operating cash flow fell to Rs 16.820 crore as inventories, receivables and other assets absorbed cash despite higher reported earnings.

The next disclosed matter to watch is shareholder approval of the proposal to lift the borrowing limit from Rs 500 crore to Rs 1,000 crore and permit security creation up to that amount. Subsequent results will also show whether the Rs 538.105 crore inventory balance at September 30, 2026 and higher receivables convert into operating cash.