Divi's Laboratories operating cash flow falls to Rs 384 crore

Divi's Laboratories Limited reported consolidated net operating cash inflow of Rs 384 crore for the half year ended 30 September 2026, down from Rs 1,645 crore a year earlier, as a Rs 1,994 crore net cash outflow from working-capital movements offset profit before tax of Rs 2,685 crore.

Why did Divi's Laboratories operating cash flow decline?

Divi's Laboratories generated Rs 384 crore from operating activities in the half year ended 30 September 2026, compared with Rs 1,645 crore in the corresponding half year of 2025. The Rs 1,261 crore decline came despite consolidated profit before tax increasing by Rs 1,040 crore, from Rs 1,645 crore to Rs 2,685 crore. Cash generated from operations before income taxes fell to Rs 959 crore from Rs 2,012 crore.

The cash-flow statement shows profit before tax adjusted to Rs 2,953 crore for the 2026 half year, against Rs 1,677 crore a year earlier. The 2026 adjustments included Rs 275 crore of depreciation and amortisation, Rs 88 crore of unrealised foreign-exchange loss and Rs 19 crore of interest expense, partly offset by Rs 115 crore of interest income. In the previous comparable period, unrealised foreign exchange was a Rs 40 crore gain and interest income was Rs 157 crore.

Income taxes paid, including withholding tax and net of refunds, rose to Rs 575 crore in the 2026 half year from Rs 367 crore in the prior-year half. This Rs 208 crore increase reduced operating cash after cash generated from operations had already declined. The figures are consolidated and include Divi's Laboratories and its two subsidiaries.

Which working-capital items absorbed Divi's Laboratories cash?

Divi's Laboratories recorded a Rs 1,585 crore cash outflow from inventory in the half year ended 30 September 2026, the largest individual operating-cash movement. That was substantially above the Rs 197 crore inventory outflow in the corresponding 2025 half year. Consolidated inventories rose to Rs 5,540 crore at 30 September 2026 from Rs 3,954 crore at 31 March 2026.

Trade receivables absorbed another Rs 604 crore of cash, reversing a Rs 188 crore cash release in the year-earlier period. Trade receivables increased to Rs 3,487 crore at 30 September 2026 from Rs 2,984 crore six months earlier. Together, inventory and receivables accounted for Rs 2,189 crore of the Rs 2,642 crore outflow across operating assets.

Other assets used Rs 449 crore of cash, compared with Rs 143 crore in the prior-year half, while other financial assets used Rs 4 crore. Other current assets increased to Rs 1,170 crore at 30 September 2026 from Rs 721 crore at 31 March 2026. The cash-flow statement does not provide a further item-by-item explanation of the other-asset movement.

How did liabilities offset Divi's Laboratories working-capital outflows?

Divi's Laboratories received a Rs 648 crore partial cash offset from changes in operating liabilities during the 2026 half year. Trade payables increased by Rs 561 crore, employee benefit obligations increased by Rs 10 crore, and other liabilities increased by Rs 120 crore. These inflows were partly reduced by a Rs 43 crore decrease in other financial liabilities.

Trade payables other than dues to micro and small enterprises stood at Rs 1,688 crore on 30 September 2026, compared with Rs 1,149 crore at 31 March 2026. Other current liabilities rose to Rs 404 crore from Rs 298 crore, while current tax liabilities increased to Rs 81 crore from Rs 12 crore. Total current liabilities were Rs 2,707 crore, up from Rs 2,043 crore at the March year end.

In the corresponding 2025 half year, working-capital movements produced a Rs 335 crore cash inflow rather than a Rs 1,994 crore outflow. A Rs 260 crore increase in other financial liabilities and a Rs 188 crore receivables cash release aided the prior-year result, whereas the same lines were a Rs 43 crore outflow and a Rs 604 crore outflow, respectively, in 2026.

What happened to Divi's Laboratories profit, investment and cash balance?

Divi's Laboratories reported revenue from operations of Rs 6,756 crore for the half year ended 30 September 2026, up from Rs 5,125 crore in the previous comparable half. Profit after tax increased to Rs 2,029 crore from Rs 1,234 crore, while profit before tax reached Rs 2,685 crore from Rs 1,645 crore. Operating cash inflow of Rs 384 crore was below both reported profit before tax and profit after tax.

Investing activities produced a Rs 596 crore net cash inflow, compared with a Rs 1,261 crore outflow a year earlier. Divi's Laboratories withdrew Rs 3,776 crore of deposits and invested Rs 2,423 crore in deposits, while payments for property, plant and equipment were Rs 872 crore. Property, plant and equipment rose to Rs 7,452 crore at 30 September 2026 from Rs 6,515 crore at 31 March 2026, while capital work-in-progress fell to Rs 1,638 crore from Rs 2,113 crore.

Financing activities used Rs 805 crore, principally through Rs 797 crore of dividends paid to shareholders. There were no net proceeds or repayments of working-capital loans in the 2026 half year, compared with Rs 83 crore of net proceeds in the prior-year period. After operating, investing and financing flows, cash and cash equivalents increased by Rs 175 crore to Rs 303 crore from Rs 128 crore at the start of the period.

Conclusion

The half-year figures show that Divi's Laboratories converted a smaller portion of its increased earnings into operating cash because operating assets absorbed more cash than liability movements supplied. Inventory, receivables and other assets used Rs 2,642 crore, while operating liabilities provided a Rs 648 crore offset, resulting in a Rs 1,994 crore net working-capital outflow.

The filing discloses no cash-flow target or capital-expenditure plan for a future period. The unresolved matter for subsequent results is whether inventories of Rs 5,540 crore, receivables of Rs 3,487 crore and other current assets of Rs 1,170 crore change after 30 September 2026, and how those movements affect operating cash generation.