Eastern Silk funds Rs 8.9917 crore operating cash outflow

Eastern Silk Industries Limited funded a Rs 8.9917 crore operating cash outflow in the half year ended September 30, 2026, with a Rs 9.20 crore increase in borrowings. The financing inflow left cash and cash equivalents, including other bank balances in the cash-flow statement, Rs 13.4 lakh higher at period end despite an Rs 19.48 lakh investing outflow.

How much operating cash did Eastern Silk use in the first half?

Eastern Silk used Rs 8.9917 crore in operating activities in the six months ended September 30, 2026, compared with an Rs 8.0404 crore outflow in the corresponding 2025 period. The operating cash outflow therefore increased by Rs 95.13 lakh year on year. The cash-flow statement records no direct taxes paid in either half-year, so cash tax payments did not affect the comparison.

The larger cash outflow occurred even as the pre-tax result improved. Eastern Silk reported a pre-tax loss of Rs 28.55 lakh for the 2026 half year, narrower than the Rs 88.13 lakh loss a year earlier. After adding back Rs 61.03 lakh of depreciation on owned assets and Rs 1.25 lakh of amortisation on leased assets, while deducting Rs 7.55 lakh of interest income, operating profit before working-capital changes was Rs 22.85 lakh, against a Rs 22.40 lakh loss previously.

The income statement reported a Rs 62.28 lakh depreciation and amortisation charge for the 2026 half year, matching the combined cash-flow adjustments. Eastern Silk's loss after tax narrowed to Rs 1.64 lakh from Rs 52 lakh in the corresponding 2025 half year. That accounting improvement did not translate into positive operating cash because movements in working-capital accounts used more cash than the prior year.

What caused Eastern Silk's operating cash outflow?

Eastern Silk's cash use was principally linked to working-capital adjustments of Rs 9.2203 crore in the half year ended September 30, 2026, compared with Rs 7.8164 crore in the prior-year period. A Rs 3.9613 crore decrease in other current and non-current financial liabilities and a Rs 3.7588 crore decrease in other current and non-current liabilities together accounted for Rs 7.7201 crore of the 2026 cash use.

Trade receivables increased by Rs 64.99 lakh and trade payables decreased by Rs 55.78 lakh in the 2026 half year, creating further cash demands. Other current and non-current financial assets increased by Rs 24.82 lakh. These movements were partly offset by a Rs 15.26 lakh decrease in current and non-current tax assets and a Rs 26.41 lakh increase in current and non-current provisions.

Inventory increased by Rs 49.63 lakh during the 2026 half year, materially below the Rs 5.2937 crore increase in the corresponding 2025 period. The smaller inventory cash use was outweighed by the shift in liability movements: other current and non-current financial liabilities had decreased by Rs 6.9452 crore in the prior-year period, while other current and non-current liabilities had increased by Rs 1.6672 crore. The mix of balance-sheet changes therefore differed between the two periods.

How did Eastern Silk fund its cash shortfall?

Eastern Silk funded the operating and investing outflows through a Rs 9.20 crore increase in current and non-current borrowings in the 2026 half year. Financing activities generated Rs 9.20 crore, compared with Rs 4.3118 crore in the corresponding 2025 period. The earlier financing inflow comprised Rs 3.3118 crore of higher borrowings and Rs 1 crore of proceeds from the issue of equity share capital.

The Rs 9.20 crore borrowing inflow exceeded the combined Rs 9.1865 crore used in operating and investing activities by Rs 13.5 lakh. Cash and cash equivalents, including other bank balances as presented in the cash-flow statement, consequently increased from Rs 4.7271 crore at the beginning of the year to Rs 4.7405 crore at September 30, 2026. In the prior-year half, the equivalent balance fell from Rs 12.9215 crore to Rs 7.0556 crore.

The balance sheet reports the September 2026 borrowing balance entirely as non-current borrowings, which rose to Rs 85.573 crore from Rs 76.373 crore at March 31, 2026. It reports no current borrowings or lease liabilities at either balance-sheet date. The Rs 9.20 crore increase in non-current borrowings matches the reported cash-flow increase in current and non-current borrowings for the half year.

What changed in Eastern Silk's balance sheet and revenue?

Eastern Silk's total assets rose to Rs 134.8912 crore at September 30, 2026 from Rs 133.7252 crore at March 31, 2026, an increase of Rs 1.166 crore. Inventories increased to Rs 39.5183 crore from Rs 39.022 crore, while trade receivables rose to Rs 3.6154 crore from Rs 2.9654 crore. Cash and cash equivalents on the balance sheet stood at Rs 3.3344 crore, alongside Rs 1.4061 crore of other bank balances.

Non-current borrowings of Rs 85.573 crore were the largest reported liability category at September 30. Other equity was Rs 34.8047 crore, slightly below Rs 34.825 crore at March 31, while property, plant and equipment declined to Rs 32.7782 crore from Rs 33.0798 crore. Deferred tax assets increased to Rs 42.6775 crore from Rs 42.4084 crore.

Revenue from operations increased to Rs 15.0023 crore in the 2026 half year from Rs 11.7406 crore a year earlier. Total income rose to Rs 15.8764 crore from Rs 12.9719 crore, while total expenses increased to Rs 16.162 crore from Rs 13.8532 crore. Eastern Silk reported one business segment, covering silk yarn, fabrics and made-ups, home furnishings, fashion fabrics, handloom fabrics, double-width fabrics, scarves, laces, belts and embroidered fabrics.

Conclusion

Eastern Silk's first-half cash flow shows that the Rs 9.20 crore increase in borrowings broadly covered the Rs 8.9917 crore operating outflow and Rs 19.48 lakh investing outflow. Revenue increased by Rs 3.2617 crore and the pre-tax loss narrowed by Rs 59.58 lakh, but the Rs 9.2203 crore working-capital cash use resulted in a wider operating outflow than in the corresponding 2025 period.

The next reported period will show whether the reductions in financial liabilities and other liabilities, together with higher receivables and inventories, reverse or persist after September 30, 2026. It will also show whether non-current borrowings move from the Rs 85.573 crore balance reported at the half-year end. The standalone results were approved by the board on November 14, 2026 and received a limited review from the statutory auditors.