Emerald Tyre Manufacturers' H1 profit falls 80% despite sales

Emerald Tyre Manufacturers Limited reported standalone net profit of Rs 1.01 crore for the half year ended September 30, 2026, down 80% from Rs 5.11 crore a year earlier, although net sales rose 5% to Rs 102.69 crore. Higher finance costs and depreciation, together with lower other income, reduced profit before tax to Rs 1.39 crore.

Why did Emerald Tyre Manufacturers’ profit fall despite higher sales?

Emerald Tyre Manufacturers’ standalone profit fell because expenses rose faster than income in the half year ended September 30, 2026. Total income increased by Rs 2.88 crore year on year to Rs 104.24 crore, but total expenses increased by Rs 8.38 crore to Rs 102.85 crore, reducing profit before tax from Rs 6.90 crore to Rs 1.39 crore.

Net sales increased by Rs 5.03 crore from Rs 97.66 crore, but other income fell by Rs 2.15 crore to Rs 1.55 crore. The filing reported no exceptional or extraordinary items for the period, meaning the lower pre-tax result reflected the reported income and expense movements rather than a separately disclosed exceptional charge.

Which costs changed at Emerald Tyre Manufacturers?

Emerald Tyre Manufacturers recorded higher finance costs, depreciation, material consumption and employee expenses in the September 2026 half year. Finance cost rose by Rs 1.41 crore to Rs 7.08 crore, while depreciation and amortisation increased by Rs 2.33 crore to Rs 5.55 crore from Rs 3.22 crore a year earlier.

Cost of materials consumed increased by Rs 2.24 crore to Rs 65.95 crore, and employee benefits expense rose by Rs 0.82 crore to Rs 14.11 crore. Other expenses declined by Rs 2.66 crore to Rs 11.66 crore, while the inventory-change line was negative Rs 1.49 crore, compared with negative Rs 5.75 crore in the prior-year half.

The inventory movement changed by Rs 4.25 crore between the two half years in the reported expense calculation. Emerald Tyre Manufacturers has one disclosed business segment, manufacturing off-highway tyres, so the standalone filing does not provide separate segment revenue or cost data.

How did Emerald Tyre Manufacturers compare with the previous half year?

Emerald Tyre Manufacturers’ September 2026-half net sales were lower than the Rs 105.27 crore reported for the half year ended March 31, 2026, while net profit also declined from Rs 3.63 crore. Sales fell by Rs 2.58 crore sequentially and net profit fell by Rs 2.62 crore.

Profit before tax declined from Rs 5.07 crore in the March 2026 half to Rs 1.39 crore in the September 2026 half. Finance cost was broadly unchanged at Rs 7.08 crore, compared with Rs 7.07 crore in the immediately preceding half, while depreciation rose from Rs 3.71 crore to Rs 5.55 crore.

Other income was Rs 1.55 crore in the September half, below Rs 3.27 crore in the March half. Total expenses were Rs 102.85 crore in the latest half, compared with Rs 103.47 crore in the March half, but total income decreased more sharply, from Rs 108.55 crore to Rs 104.24 crore.

What happened to Emerald Tyre Manufacturers’ earnings per share and dividend?

Emerald Tyre Manufacturers reported basic and diluted earnings per share of Rs 0.52 for the half year ended September 30, 2026, compared with Rs 2.62 a year earlier. The company said half-year earnings per share were based on the weighted average number of shares and were not annualised.

The latest-half tax charge comprised current tax of Rs 2.69 lakh and deferred tax of Rs 35.65 lakh, compared with current tax of Rs 1.48 crore and deferred tax of Rs 30.81 lakh in the corresponding period. Net profit fell by Rs 4.10 crore despite the lower reported tax charge because profit before tax decreased by Rs 5.50 crore.

Shareholders approved a final dividend of Rs 1 per equity share, equal to 10% of the Rs 10 face value, at the annual general meeting on September 24, 2026. Emerald Tyre Manufacturers said it paid the dividend to eligible shareholders on October 7, 2026, after the September 17 cut-off date.

How did Emerald Tyre Manufacturers’ balance sheet and cash position change?

Emerald Tyre Manufacturers’ standalone total assets stood at Rs 293.32 crore on September 30, 2026, up from Rs 287.63 crore on March 31, 2026. Non-current assets rose by Rs 10.51 crore to Rs 153.94 crore, including non-current investments of Rs 23.30 crore compared with Rs 11.07 crore at the financial year-end.

Long-term borrowings increased to Rs 60.21 crore from Rs 56.68 crore, while short-term borrowings increased to Rs 68.94 crore from Rs 66.73 crore. Shareholders’ funds declined by Rs 0.94 crore to Rs 126.19 crore as reserves and surplus decreased to Rs 106.72 crore from Rs 107.65 crore.

Inventories increased by Rs 3.90 crore to Rs 62.57 crore, while trade receivables fell by Rs 3.90 crore to Rs 62.45 crore. Cash and bank balances declined by Rs 1.56 crore to Rs 8.80 crore at September 30, 2026.

Did Emerald Tyre Manufacturers generate operating cash and report consolidation changes?

Emerald Tyre Manufacturers generated net operating cash flow of Rs 17.67 crore in the September 2026 half, compared with Rs 8.51 crore in the corresponding 2025 period. Cash generated from operations was Rs 18.93 crore before net income-tax payments of Rs 1.26 crore, with trade receivables declining by Rs 5.33 crore and trade payables increasing by Rs 4.89 crore.

Investing activities used Rs 16.07 crore, including Rs 12.23 crore for increased long-term investments and Rs 3.83 crore for purchases of property, plant and equipment, including capital work in progress. Financing activities used Rs 3.17 crore after Rs 7.08 crore of finance cost and Rs 1.95 crore of dividends paid including tax, despite net proceeds of Rs 3.52 crore from long-term borrowings.

On a consolidated basis, Emerald Tyre Manufacturers reported net sales of Rs 115.87 crore and net profit after minority interest of Rs 1.96 crore for the September 2026 half. Emerald Tyres Africa Pty Limited became a subsidiary on September 10, 2026 after Emerald Tyre Manufacturers acquired 64.44% of its paid-up share capital, and the company said prior-year consolidated figures were not comparable.

Conclusion

Emerald Tyre Manufacturers increased standalone sales in the half year ended September 30, 2026, but the additional revenue did not offset higher finance cost, depreciation, material consumption and employee expenses, as well as lower other income. The resulting reduction in profit before tax led standalone net profit to fall from Rs 5.11 crore to Rs 1.01 crore.

The next financial results will show whether the higher borrowing levels, finance cost of Rs 7.08 crore and depreciation of Rs 5.55 crore persist beyond the September half. Consolidated reporting will also contain a longer contribution from Emerald Tyres Africa Pty Limited than the period beginning September 10, 2026; the auditor said subsidiary interim accounts used in the consolidated review had not been reviewed by those subsidiaries’ auditors.