Choksi Laboratories Q2 profit falls 30% as costs climb

Choksi Laboratories Limited reported net profit of Rs 16.87 lakh for the quarter ended 30 September 2026, down about 30% from Rs 24.21 lakh a year earlier, despite revenue from operations rising 12% to Rs 12.43 crore. Total expenses increased to Rs 12.15 crore from Rs 10.57 crore, outpacing the rise in income.

Why did Choksi Laboratories’ Q2 profit fall despite revenue growth?

Choksi Laboratories’ Q2 profit fell because total expenses increased by Rs 1.58 crore year on year, exceeding the Rs 1.31 crore rise in revenue from operations. Revenue increased to Rs 12.43 crore in the three months ended 30 September 2026 from Rs 11.12 crore in the corresponding quarter of 2025, while total income rose to Rs 12.54 crore from Rs 11.13 crore.

Profit before tax declined to Rs 38.84 lakh from Rs 56.25 lakh in the year-earlier quarter, with no exceptional item reported in either period. Net profit was Rs 16.87 lakh against Rs 24.21 lakh, and basic and diluted earnings per share fell to Rs 0.24 from Rs 0.35.

The sequential comparison also showed a lower September-quarter profit conversion. Revenue from operations rose from Rs 12.06 crore in the preceding three months ended 30 June 2026 to Rs 12.43 crore, but net profit fell from Rs 58.24 lakh to Rs 16.87 lakh. Profit before tax declined from Rs 59.93 lakh in the June quarter to Rs 38.84 lakh in the September quarter.

Which costs increased in Choksi Laboratories’ second quarter?

Choksi Laboratories’ employee-benefit expense was the largest expense line and rose to Rs 5.56 crore in Q2 from Rs 4.57 crore a year earlier. The Rs 98.74 lakh increase in employee benefits accounted for a substantial part of the Rs 1.58 crore rise in total expenses between the September 2025 and September 2026 quarters.

Depreciation and amortisation increased to Rs 1.86 crore from Rs 1.69 crore, while laboratories and instruments maintenance expense rose to Rs 1.32 crore from Rs 1.08 crore. Cost of materials consumed increased to Rs 88.91 lakh from Rs 70.90 lakh, finance cost rose to Rs 74.99 lakh from Rs 69.36 lakh, and power and fuel charges climbed to Rs 32.86 lakh from Rs 25.95 lakh.

Other expenses were the main reported cost line that declined, falling to Rs 1.44 crore from Rs 1.57 crore in the corresponding prior-year quarter. That Rs 12.77 lakh reduction did not offset the increases in employee benefits, depreciation, maintenance, materials, finance cost and power and fuel, leaving total expenses at Rs 12.15 crore.

How did Choksi Laboratories perform in the first half?

Choksi Laboratories increased revenue from operations to Rs 24.49 crore for the six months ended 30 September 2026 from Rs 22.36 crore in the corresponding six months of 2025. Total income rose to Rs 24.62 crore from Rs 22.38 crore, including other income of Rs 12.72 lakh versus Rs 1.81 lakh.

First-half net profit rose to Rs 75.11 lakh from Rs 62.71 lakh, which contrasted with the year-on-year decline in the September quarter alone. Profit before tax for the half year, however, declined to Rs 98.77 lakh from Rs 1.19 crore, while basic and diluted earnings per share increased to Rs 1.08 from Rs 0.90.

First-half total expenses increased to Rs 23.63 crore from Rs 21.19 crore. Employee-benefit expense rose to Rs 10.44 crore from Rs 9.16 crore, depreciation and amortisation reached Rs 3.83 crore from Rs 3.36 crore, and laboratories and instruments maintenance increased to Rs 2.33 crore from Rs 2.21 crore.

Choksi Laboratories identifies Analysis and Testing as its single operating segment for continuing operations under Indian Accounting Standard 108, or Ind AS 108. The company therefore did not provide separate revenue, profit or asset data for multiple operating businesses in the results for the six months ended 30 September 2026.

What changed in Choksi Laboratories’ balance sheet and cash flows?

Choksi Laboratories’ total assets rose to Rs 75.18 crore at 30 September 2026 from Rs 71.92 crore at 31 March 2026. Property, plant and equipment increased to Rs 48.82 crore from Rs 47.42 crore, capital work-in-progress rose to Rs 1.62 crore from Rs 40.16 lakh, and trade receivables increased to Rs 16.05 crore from Rs 14.73 crore.

Total equity increased to Rs 26.37 crore from Rs 25.58 crore, while total liabilities rose to Rs 48.81 crore from Rs 46.35 crore. Long-term borrowings increased to Rs 24.82 crore from Rs 17.81 crore, whereas current liabilities declined to Rs 18.68 crore from Rs 23.09 crore and short-term borrowings fell to Rs 7.44 crore from Rs 12.37 crore.

Net cash outflow from investing activities was Rs 5.92 crore in the six months ended 30 September 2026, compared with Rs 2.07 crore in the corresponding period a year earlier. Payments for property, plant and equipment were Rs 5.32 crore and payments for capital work-in-progress were Rs 1.22 crore, compared with Rs 1.53 crore and Rs 48.08 lakh respectively in the prior-year half.

Cash and cash equivalents ended the half year at Rs 22.39 lakh, down from Rs 30.86 lakh at the start of the financial year. The cash-flow statement showed a Rs 24.50 lakh net inflow from financing activities, compared with a Rs 89.64 lakh net outflow in the corresponding half of 2025.

Were Choksi Laboratories’ results reviewed and approved?

Choksi Laboratories’ unaudited standalone financial results for the quarter and half year ended 30 September 2026 were reviewed by the Audit Committee and approved by the Board of Directors on 14 November 2026. The results were prepared under Ind AS 34, Interim Financial Reporting, and Regulation 33 of the Securities and Exchange Board of India listing regulations.

Prateek Jain & Co. issued its limited-review report on 14 November 2026. The auditor said nothing had come to its attention that caused it to believe the results were not prepared, in all material respects, in accordance with applicable accounting standards and disclosure requirements.

The auditor also stated that a limited review is substantially narrower in scope than an audit under auditing standards. Its report covered the standalone financial results for the quarter ended 30 September 2026 and the six-month period from 1 April 2026 to 30 September 2026.

Conclusion

Choksi Laboratories reported higher Q2 revenue but lower quarterly profit for the period ended 30 September 2026. Revenue from operations increased to Rs 12.43 crore, while employee benefits, depreciation, laboratory maintenance and several other expense lines lifted total expenses to Rs 12.15 crore and reduced net profit to Rs 16.87 lakh.

The filing contains no earnings target or operating forecast. The unresolved issue for subsequent disclosures is whether employee-benefit expense, depreciation and laboratories and instruments maintenance continue to rise faster than revenue, alongside the effect of Rs 5.32 crore of first-half spending on property, plant and equipment and Rs 1.22 crore on capital work-in-progress.