Chemkart reports Rs 18.70 crore H1 operating cash outflow

Chemkart India Limited reported Rs 22.5590 crore of consolidated profit after tax for the half year ended September 30, 2026, but its operating activities used Rs 18.7047 crore of cash. The unaudited outflow principally reflected higher trade receivables, inventory and other working-capital deployment as consolidated revenue reached Rs 205.8729 crore.

Why did Chemkart report negative operating cash flow?

Chemkart reported negative consolidated operating cash flow because receivables, inventory and other working-capital items absorbed cash during H1 FY27. Operating activities used Rs 18.7047 crore in the half year ended September 30, 2026, despite consolidated profit before tax of Rs 30.1138 crore and profit after tax of Rs 22.5590 crore.

The gap reflects the difference between profit recognised on an accrual basis and cash received or paid during the period. Chemkart said the working-capital deployment accompanied a higher business scale, with consolidated revenue from operations at Rs 205.8729 crore in H1 FY27, versus Rs 103.2256 crore in H1 FY26 and Rs 111.6035 crore in H2 FY26.

Consolidated profit after tax rose from Rs 10.1526 crore in H1 FY26 to Rs 22.5590 crore in H1 FY27, while operating cash remained negative. Management identified collections, inventory efficiency and conversion of earnings into cash as priorities as the business expands.

The standalone cash flow statement showed a similar pattern in the core business. Standalone operating activities used Rs 18.0512 crore, compared with standalone profit after tax of Rs 22.9133 crore for the half year ended September 30, 2026.

How did Chemkart’s working-capital balances change?

Chemkart’s consolidated trade receivables increased by Rs 39.5220 crore and inventory rose by Rs 9.0421 crore between March 31, 2026 and September 30, 2026. Total current assets increased by Rs 57.1221 crore, while cash and cash equivalents decreased by Rs 5.6254 crore over the same period.

Receivables were the largest stated working-capital movement, ending September 2026 at Rs 89.4983 crore compared with Rs 49.9763 crore at the preceding March year-end. Chemkart linked the increase to revenue growth and said the receivables-to-turnover ratio improved marginally against the corresponding period, without disclosing the ratio or collection days.

Inventory increased 26.0% to Rs 43.7682 crore from Rs 34.7261 crore. Management said the increase was consistent with higher trading activity and working-capital deployment, and that inventory levels would be monitored against customer demand and procurement cycles.

How did Chemkart fund its H1 FY27 cash requirements?

Chemkart recorded Rs 16.1039 crore of consolidated financing inflows in H1 FY27, partly offsetting cash outflows from operating and investing activities. The filing describes this line as net borrowings and related flows, and says the inflows supported growing working-capital requirements and business operations.

Investing activities used Rs 3.0247 crore during the half year, reflecting investments in subsidiaries and ongoing expansion initiatives. The Rs 18.7047 crore operating outflow and Rs 3.0247 crore investing outflow exceeded the Rs 16.1039 crore financing inflow, producing a Rs 5.6254 crore net decrease in consolidated cash.

Closing consolidated cash and cash equivalents were Rs 33.0200 crore at September 30, 2026, down from Rs 38.6454 crore at March 31, 2026. Consolidated total assets nevertheless increased to Rs 218.5169 crore from Rs 157.0753 crore, while net worth rose by Rs 22.5498 crore to Rs 152.2796 crore, principally reflecting retained profit.

What does Chemkart’s cash flow show about its expansion plans?

Chemkart’s cash flow shows that the Group was supporting a larger operating cycle while continuing manufacturing development in H1 FY27. Consolidated capital work-in-progress increased to Rs 9.5695 crore at September 30, 2026 from Rs 4.8677 crore at March 31, 2026.

Easy Raw Materials Private Limited, a wholly owned subsidiary, is developing the greenfield facility at the Jawaharlal Nehru Port Authority Special Economic Zone in Maharashtra. The facility had not begun commercial operations at the date of the disclosure, while the October 2026 investor presentation reported ongoing structural work, warehouse steel erection and boundary construction involving 55 project supervision and construction personnel.

Chemkart allocated Rs 34.6833 crore of initial public offering proceeds to the manufacturing facility. It had used Rs 9.6839 crore by September 30, 2026, leaving Rs 24.9994 crore for deployment, including Rs 14.0929 crore in liquid funds, Rs 10 crore in fixed deposits and Rs 90.65 lakh in a current account.

The filing also states that Rs 20 crore of initial public offering proceeds had been fully used to repay borrowings, while Rs 9.7966 crore had been fully used for general corporate purposes and initial public offering expenses. Those disclosed uses are separate from the H1 FY27 financing cash-flow line, which was described as supporting working capital and business operations.

Conclusion

Chemkart combined higher revenue and profit with a Rs 18.7047 crore consolidated operating cash outflow in H1 FY27. Receivables increased by Rs 39.5220 crore and inventory by Rs 9.0421 crore, indicating that more cash was tied up in the operating cycle even as consolidated profit after tax reached Rs 22.5590 crore.

The next items to watch are management’s stated focus on collections, inventory turns, receivables and cash conversion, as well as construction progress at the JNPA facility. Chemkart is pursuing a targeted 2027 commissioning milestone, subject to project execution, equipment delivery and applicable regulatory requirements.