D. P. Abhushan inventory rise coincides with cash outflow

For the half-year ended September 30, 2026, D. P. Abhushan Limited reported a Rs 66.3006 crore net operating cash outflow after inventory rose Rs 246.122 crore to Rs 1,250.0653 crore, while current borrowings increased Rs 70.0864 crore from March 31, 2026.

Why did D. P. Abhushan report an operating cash outflow?

D. P. Abhushan reported negative operating cash flow because its Rs 156.0331 crore operating profit before working-capital changes was outweighed by a Rs 246.122 crore increase in inventory and other movements in the half-year ended September 30, 2026. Cash generated from operations was negative Rs 36.3408 crore before direct taxes, and net direct taxes paid of Rs 29.9598 crore resulted in a Rs 66.3006 crore net operating cash outflow.

The Rs 246.122 crore inventory movement was the largest stated use of working capital and exceeded operating profit before working-capital changes by Rs 90.0889 crore. Other current assets absorbed Rs 15.9871 crore, while a Rs 31.4523 crore increase in trade payables, a Rs 32.3103 crore increase in other current liabilities and a Rs 5.3329 crore increase in provisions partly offset those uses.

D. P. Abhushan prepared the cash-flow statement under the indirect method set out in Indian Accounting Standard 7, or Ind AS 7. It began with profit before tax of Rs 139.2932 crore for the six months and adjusted for items including finance cost of Rs 10.7188 crore and depreciation and amortisation of Rs 5.1241 crore before reaching the operating-profit measure.

How much did D. P. Abhushan’s working capital change?

D. P. Abhushan’s inventory balance increased to Rs 1,250.0653 crore at September 30, 2026 from Rs 1,003.9433 crore at March 31, 2026, a rise of Rs 246.122 crore. Total current assets increased by Rs 251.2748 crore to Rs 1,302.5169 crore, meaning the inventory increase accounted for almost the entire rise in current assets.

Trade receivables declined to Rs 0.33 crore at September 30, 2026 from Rs 1.6437 crore at March 31, releasing Rs 1.3137 crore in the cash-flow statement. Other current assets rose to Rs 35.1234 crore from Rs 19.1363 crore. The company identifies Gems & Jewellery, including wholesale and retail trade and manufacturing of jewellery and ornaments, as its sole reportable segment under Indian Accounting Standard 108.

The income statement recorded a negative Rs 268.3842 crore change in inventories of finished goods and stock-in-trade for the half-year ended September 30, 2026, compared with negative Rs 79.5559 crore in the corresponding half-year ended September 30, 2025. Purchases of stock-in-trade increased to Rs 1,431.5769 crore from Rs 1,091.036 crore, alongside the higher September inventory balance.

How did D. P. Abhushan fund the inventory increase?

D. P. Abhushan’s current borrowings rose to Rs 354.0989 crore at September 30, 2026 from Rs 284.0125 crore at March 31, 2026, an increase of Rs 70.0864 crore. The cash-flow statement recorded Rs 71.5295 crore of proceeds from current borrowings over the six-month period, while proceeds from non-current borrowings were Rs 0.7597 crore.

Net cash from financing activities was Rs 60.3207 crore during the half-year, after Rs 10.7188 crore of finance-cost payments and Rs 1.2498 crore of lease-liability payments. That financing inflow did not fully offset the Rs 66.3006 crore operating outflow and Rs 3.4219 crore investing outflow, leaving cash and cash equivalents Rs 9.4019 crore lower at Rs 16.3527 crore.

Trade payables to creditors other than micro and small enterprises rose to Rs 127.432 crore from Rs 60.1702 crore between March 31 and September 30. Dues to micro and small enterprises declined to Rs 17.6276 crore from Rs 53.4372 crore, while other current liabilities increased by Rs 32.3103 crore to Rs 115.1399 crore.

Total equity rose to Rs 739.1521 crore at September 30, 2026 from Rs 632.6124 crore at March 31, 2026, including other equity of Rs 716.3241 crore. Total assets increased to Rs 1,395.2855 crore from Rs 1,142.6167 crore, and non-current borrowings increased to Rs 4.1287 crore from Rs 3.369 crore.

Did D. P. Abhushan’s earnings increase despite cash absorption?

D. P. Abhushan’s revenue from operations increased to Rs 1,612.3033 crore for the half-year ended September 30, 2026 from Rs 1,508.0251 crore in the corresponding previous half-year. Profit after tax rose to Rs 104.1939 crore from Rs 87.8842 crore, while profit before tax increased to Rs 139.2932 crore from Rs 117.9022 crore.

The cash-flow outcome differed from reported earnings because inventory growth and direct-tax payments absorbed cash in the same six-month period. Finance costs increased to Rs 10.7188 crore from Rs 7.8038 crore in the prior-year half-year, while employee-benefit expense increased to Rs 23.585 crore from Rs 18.2874 crore. Basic earnings per share were Rs 45.64, compared with Rs 38.64 a year earlier.

Revenue from operations in the quarter ended September 30, 2026 was Rs 759.9036 crore, lower than Rs 852.3997 crore in the preceding quarter ended June 30, 2026. Quarterly profit after tax was Rs 39.7445 crore, compared with Rs 64.4495 crore in the June 2026 quarter, even as half-year revenue and profit were above the corresponding 2025 period.

The September 30, 2026 standalone results were unaudited and were approved by the board on November 6, 2026 following Audit Committee review. The statutory auditor conducted a limited review and stated that nothing had come to its attention indicating that the results failed to make disclosures required under the applicable listing regulations.

Conclusion

D. P. Abhushan reported higher half-year revenue of Rs 1,612.3033 crore and profit after tax of Rs 104.1939 crore, but inventory of Rs 1,250.0653 crore absorbed Rs 246.122 crore of cash from March 31. The inventory movement was the principal stated working-capital use behind the Rs 66.3006 crore operating cash outflow, alongside a Rs 70.0864 crore increase in current borrowings.

The filing does not disclose an inventory-conversion plan or a current-borrowing repayment target. The unresolved issue for subsequent disclosures is whether inventory, current borrowings of Rs 354.0989 crore, trade payables of Rs 145.0596 crore and cash of Rs 16.3527 crore change alongside operating cash flow.