Deepak Spinners swings to Rs 9.76 crore first-half profit

Deepak Spinners Limited reported a Rs 9.76 crore profit before tax for the half year ended September 30, 2026, reversing a Rs 2.19 crore loss a year earlier. Revenue from operations rose to Rs 306.20 crore from Rs 278.24 crore, while the company recognised Rs 4.2005 crore of electricity-consumption rebate income.

How did Deepak Spinners return to first-half profit?

Deepak Spinners returned to pre-tax profit because total income exceeded total expenses by Rs 9.76 crore in the half year ended September 30, 2026. This compared with expenses exceeding income by Rs 2.19 crore in the corresponding half year of 2025, an improvement of Rs 11.95 crore in profit before tax.

Profit after tax was Rs 7.49 crore, against a Rs 1.64 crore loss after tax a year earlier. Tax expense was Rs 2.26 crore in the latest half year, compared with a Rs 55 lakh tax credit in the previous-year period, while basic and diluted earnings per share were Rs 10.42 against a loss per share of Rs 2.28.

The quarter ended September 30, 2026 accounted for Rs 5.61 crore of the half-year pre-tax profit and Rs 4.40 crore of profit after tax. Quarterly revenue from operations was Rs 169.38 crore, compared with Rs 136.82 crore in the June 2026 quarter and Rs 139.47 crore in the September 2025 quarter.

What changed in Deepak Spinners' income and costs?

Deepak Spinners' operating revenue increased by Rs 27.96 crore year on year to Rs 306.20 crore in the six months to September 2026. Total income increased by Rs 32.72 crore to Rs 312.52 crore, as other income rose by Rs 4.76 crore to Rs 6.32 crore.

Materials consumed increased to Rs 179.21 crore from Rs 157.93 crore, employee-benefit expense rose to Rs 39.09 crore from Rs 36.83 crore, and other expenses reached Rs 56.68 crore from Rs 54.18 crore. Changes in inventories of finished goods, work in progress and waste were Rs 18.38 crore, lower than Rs 22.66 crore in the prior-year half.

Finance costs declined to Rs 1.05 crore from Rs 1.76 crore and depreciation and amortisation fell to Rs 8.35 crore from Rs 8.63 crore. The combination of higher total income and these cost movements resulted in Rs 302.76 crore of expenses against Rs 312.52 crore of income, unlike the prior-year comparison where expenses were Rs 281.99 crore and income was Rs 279.80 crore.

How much electricity rebate did Deepak Spinners recognise?

Deepak Spinners recognised Rs 4.2005 crore of incremental electricity-consumption rebate as other income during the half year ended September 30, 2026. Its distribution company, Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited, or MPMKVVCL, credited the amount through monthly bills following an April 28, 2026 order of the Vidyut Upbhokta Shikayat Nivaran Forum, Bhopal.

MPMKVVCL determined a total incremental consumption rebate entitlement of Rs 9.4513 crore, payable in instalments and subject to a base-year clarification from the Madhya Pradesh Electricity Regulatory Commission, or MPERC. Of the recognised amount, Rs 3.1504 crore was credited in the September 2026 quarter.

Deepak Spinners did not recognise the remaining Rs 5.2508 crore as income. The company said the balance was probable but not virtually certain of realisation based on past experience, and it will account for it when it is credited or when realisation otherwise becomes virtually certain.

What did Deepak Spinners' balance sheet and cash flow show?

Deepak Spinners reported total assets of Rs 309.95 crore at September 30, 2026, compared with Rs 318.22 crore at March 31, 2026. Property, plant and equipment were Rs 161.11 crore at September 30, against Rs 162.06 crore at the March year-end, while total equity increased to Rs 237.61 crore from Rs 229.40 crore.

Inventories declined to Rs 71.26 crore from Rs 87.39 crore, while trade receivables increased to Rs 53.89 crore from Rs 33.08 crore. Current borrowings fell to Rs 8.95 crore from Rs 30.48 crore, and total current liabilities decreased to Rs 57.54 crore from Rs 76.77 crore.

Cash and cash equivalents rose to Rs 19 lakh at September 30, 2026 from Rs 4 lakh at the beginning of the financial year. The cash-flow statement recorded Rs 23.01 crore of net operating cash flow, Rs 49 lakh of property, plant and equipment purchases including capital advances, and Rs 21.54 crore of net repayment of short-term borrowings in the six-month period.

What disclosures accompanied Deepak Spinners' results?

Deepak Spinners reported yarn as its single primary business segment and said it had no other reportable segment under Indian Accounting Standard 108, Operating Segments. The Rs 306.20 crore of half-year operating revenue was therefore disclosed without a separate business-segment split.

Salarpuria & Partners completed a limited review of the standalone unaudited results for the period from April 1, 2026 to September 30, 2026. The auditor said nothing had come to its attention to indicate that the financial statement was not prepared under the applicable Indian Accounting Standards and listing requirements, while noting that a review is narrower than an audit.

The audit committee reviewed the results and the board approved them on October 30, 2026. The filing also says the September 2026 and September 2025 quarterly figures are balancing figures between the respective half-year results and the June-quarter figures, both of which underwent limited review.

Conclusion

Deepak Spinners' first-half reversal reflected a Rs 27.96 crore increase in revenue from operations, lower finance costs and Rs 4.2005 crore of recognised rebate income. These factors lifted total income to Rs 312.52 crore and resulted in Rs 9.76 crore of pre-tax profit, against a Rs 2.19 crore loss a year earlier.

The next disclosed matter to watch is MPERC's base-year clarification and further MPMKVVCL bill credits against the Rs 5.2508 crore rebate balance. Deepak Spinners has said it will recognise that amount only when it is credited or when realisation otherwise becomes virtually certain.