Cheviot September profit falls 76% as other income drops

Cheviot Company Limited reported profit of Rs 10.96 crore for the quarter ended 30 September 2026, down 75.8% from the June quarter, because other income fell to Rs 94.87 lakh from Rs 36.39 crore even as revenue from operations rose 11.3% to Rs 189.82 crore.

Why did Cheviot’s September-quarter profit fall sequentially?

Cheviot’s September-quarter profit fell mainly because other income normalised after the Rs 36.39 crore recorded in the June 2026 quarter. Profit for the period declined from Rs 45.29 crore in the quarter ended 30 June 2026 to Rs 10.96 crore in the quarter ended 30 September 2026, while profit before tax decreased from Rs 55.41 crore to Rs 14.70 crore.

Other income fell by Rs 35.44 crore sequentially, reaching Rs 94.87 lakh in September from Rs 36.39 crore in June. Consequently, total income declined from Rs 206.94 crore to Rs 190.77 crore, despite revenue from operations increasing by Rs 19.27 crore over the same period. The half-year cash-flow statement reports a Rs 31.53 crore net gain on fair-value changes in investments measured at fair value through profit or loss, or FVTPL.

Profit was also below the Rs 14.84 crore reported in the quarter ended 30 September 2025. In that earlier quarter, other income was negative Rs 24.13 lakh, which Cheviot said was primarily due to a loss on fair valuation of FVTPL investments. The latest September-quarter profit before tax of Rs 14.70 crore was lower than the prior-year Rs 20.22 crore.

How did Cheviot’s operating revenue and costs change in September?

Cheviot’s revenue from operations increased 11.3% sequentially and 28.1% year on year to Rs 189.82 crore in the September 2026 quarter. Revenue was Rs 170.55 crore in the June 2026 quarter and Rs 148.21 crore in the September 2025 quarter. Cheviot reports a single significant primary business segment, Jute Goods, and gives no separate segment information.

Total expenses rose to Rs 176.06 crore in September from Rs 151.53 crore in June. Cost of materials consumed increased by Rs 10.64 crore to Rs 127.71 crore, while changes in inventories of finished goods and work-in-progress shifted to an expense of Rs 8.81 crore from a Rs 1.39 crore credit in the preceding quarter.

Employee-benefit expense was Rs 17.74 crore, compared with Rs 17.09 crore in June and Rs 20.81 crore a year earlier. Other expenses increased to Rs 19.76 crore from Rs 16.70 crore, while finance costs fell to Rs 6.58 lakh from Rs 12.04 lakh. Depreciation and amortisation were Rs 1.98 crore, compared with Rs 1.94 crore in the June quarter.

What was the effect of retrospective jute-bag price revisions?

Cheviot recognised Rs 7.40 crore of additional revenue from operations in the half year ended 30 September 2026 after jute-bag price revisions for supplies to State Procurement Agencies in earlier years. The recognition followed Gazette notifications issued by the Office of the Jute Commissioner during the six-month period.

Rs 1.94 crore of the retrospective revenue was recognised in the June 2026 quarter and Rs 5.46 crore in the September 2026 quarter. Cheviot classified both amounts as revenue from operations, rather than other income. Therefore, September-quarter operating revenue of Rs 189.82 crore included Rs 5.46 crore relating to supplies made in earlier years.

For the half year ended 30 September 2026, revenue from operations rose 34.5% to Rs 360.37 crore from Rs 267.93 crore a year earlier. Total income increased to Rs 397.70 crore from Rs 285.73 crore, reflecting the Rs 7.40 crore revision recognition and other income of Rs 37.33 crore, compared with Rs 17.80 crore in the corresponding period.

Did Cheviot’s first-half profit increase year on year?

Cheviot’s first-half profit increased 29.2% year on year to Rs 56.25 crore for the six months ended 30 September 2026. Profit in the corresponding prior-year half was Rs 43.55 crore, while profit before tax increased to Rs 70.11 crore from Rs 56.21 crore.

The profit increase occurred although total expenses rose 42.7% to Rs 327.59 crore from Rs 229.52 crore. Materials consumed climbed to Rs 244.78 crore from Rs 148.65 crore, whereas employee-benefit expense declined to Rs 34.83 crore from Rs 40.16 crore. Finance costs decreased to Rs 18.62 lakh from Rs 21.09 lakh.

Tax expense was Rs 13.86 crore for the latest half year, compared with Rs 12.66 crore a year earlier. Basic and diluted earnings per equity share, which were not annualised, were Rs 96.29 for the six months, up from Rs 74.55. There were no exceptional items in either half-year period.

What do Cheviot’s balance sheet and cash flows show?

Cheviot reported total assets of Rs 806.61 crore at 30 September 2026, compared with Rs 770.39 crore at 31 March 2026. Total equity rose to Rs 746.05 crore from Rs 705.85 crore, while other equity increased to Rs 740.20 crore from Rs 700.01 crore.

Non-current investments increased to Rs 361.81 crore at 30 September from Rs 326.22 crore at the preceding year-end. Inventories fell to Rs 98.27 crore from Rs 130.84 crore, but trade receivables rose to Rs 57.78 crore from Rs 34.53 crore. Current borrowings decreased to Rs 5.66 crore from Rs 7.25 crore.

Net cash from operating activities was Rs 28.07 crore for the six months, down from Rs 50.48 crore in the prior-year period. Cash generated from operations declined to Rs 41.07 crore from Rs 59.15 crore, while direct taxes paid increased to Rs 13.01 crore from Rs 8.67 crore. Cheviot paid Rs 14.60 crore in dividends during the period and ended September with cash and cash equivalents of Rs 2.47 crore.

Conclusion

Cheviot’s September-quarter result shows that higher Jute Goods revenue did not offset a sharp sequential decline in other income. Revenue rose to Rs 189.82 crore, including Rs 5.46 crore of retrospective price revisions, but total expenses increased to Rs 176.06 crore and profit fell to Rs 10.96 crore from Rs 45.29 crore in June.

The disclosed item to watch is the effect of the Rs 7.40 crore of first-half revenue recognised for earlier-year jute-bag supplies to State Procurement Agencies. Cheviot also reported trade receivables of Rs 57.78 crore at 30 September 2026 and first-half operating cash flow of Rs 28.07 crore, versus Rs 50.48 crore a year earlier.