Eppeltone profit falls 13% as revenue rises 8% in H1

Eppeltone Engineers Limited reported profit after tax of Rs 5.44 crore for the half year ended September 30, 2026, down 13% from Rs 6.26 crore a year earlier, despite revenue from operations rising 8% to Rs 50.14 crore. Eppeltone also recorded a Rs 12.93 crore operating cash outflow as inventory rose and trade payables declined.

Why did Eppeltone’s September-half profit fall?

Eppeltone’s profit after tax fell because a marginal increase in pre-tax profit was outweighed by a higher tax charge. Profit before tax increased to Rs 7.12 crore in the half year ended September 30, 2026, from Rs 7.07 crore a year earlier, but current tax rose to Rs 1.60 crore from Rs 73 lakh. Profit after tax consequently declined by Rs 81.70 lakh to Rs 5.44 crore.

Basic and diluted earnings per share were Rs 4.20, compared with Rs 5.51 in the September 2025 half. The company reported no exceptional or extraordinary items in either period. The year-on-year movement therefore reflects the reported operating, finance-cost and tax lines rather than any separately identified exceptional item.

The March 31, 2026 half-year comparison shows revenue from operations of Rs 88.47 crore and profit after tax of Rs 6.12 crore. However, Eppeltone says those March-half figures are balancing figures between the audited full-year results and management-compiled September 2025 half-year figures, and were neither audited nor reviewed by the statutory auditor.

How did Eppeltone’s revenue and costs change?

Eppeltone’s revenue from operations increased by Rs 3.86 crore year on year to Rs 50.14 crore, while other income rose to Rs 93.54 lakh from Rs 31.43 lakh. Total revenue therefore increased to Rs 51.07 crore from Rs 46.59 crore in the corresponding half of 2025.

Total expenses increased by Rs 4.43 crore to Rs 43.95 crore, exceeding the Rs 3.86 crore increase in operating revenue. Material consumed rose by Rs 1.42 crore to Rs 44.24 crore, employee-benefit expense increased by Rs 80.89 lakh to Rs 3.76 crore, and finance cost rose by Rs 72.49 lakh to Rs 1.86 crore.

The change in inventory of finished goods and work in progress was a negative Rs 13.14 crore expense adjustment, compared with a negative Rs 14.50 crore adjustment a year earlier. Other expenses were Rs 6.37 crore versus Rs 6.36 crore, depreciation and amortisation were Rs 86.07 lakh versus Rs 75.32 lakh, and no purchases of traded goods were reported in either half.

Eppeltone describes itself as a single-segment manufacturer of electronic energy meters, including smart meters, and power-conditioning devices such as high-grade chargers and uninterruptible power supply systems. Its financial statement does not provide separate sales, profit or asset data for meter products, chargers or other product categories.

What changed in Eppeltone’s working capital and borrowings?

Eppeltone’s inventory rose by Rs 12.20 crore from March 31, 2026 to Rs 70.76 crore at September 30, 2026. Trade receivables moved in the opposite direction, declining by Rs 18.36 crore to Rs 50.57 crore. The cash-flow statement records these movements as an inventory outflow and a receivables inflow during the half year.

Trade payables to micro and small enterprises declined to Rs 14.50 crore from Rs 15.40 crore, while dues to other creditors fell to Rs 18.34 crore from Rs 32.32 crore. Together, those categories declined by Rs 14.88 crore, matching the decrease in trade payables and others reported in operating cash flow.

Long-term borrowings rose to Rs 35.94 crore at September 30 from Rs 16.48 crore at March 31. Short-term borrowings declined to Rs 17.72 crore from Rs 22.52 crore. Total reported long-term and short-term borrowings therefore increased by Rs 14.65 crore during the six months.

The balance sheet also shows additions to assets under development. Capital work in progress increased to Rs 4.15 crore from Rs 1.85 crore, intangible assets under development rose to Rs 7.53 crore from Rs 4.56 crore, and property, plant and equipment increased to Rs 32.61 crore from Rs 31.80 crore.

Why was Eppeltone’s operating cash flow negative?

Eppeltone reported net cash outflow from operating activities of Rs 12.93 crore for the September 2026 half, compared with an outflow of Rs 21.14 crore in the September 2025 half. The deficit narrowed by Rs 8.21 crore year on year, but cash generated from operations remained negative despite the company reporting Rs 7.12 crore of pre-tax profit.

Operating profit before working-capital changes was Rs 7.35 crore, down from Rs 7.83 crore a year earlier. A Rs 12.20 crore inventory increase, a Rs 14.88 crore decrease in trade payables and others, and a Rs 4.80 crore decrease in short-term borrowings were among the cash outflows that produced negative cash generated from operations of Rs 11.37 crore.

The Rs 18.36 crore reduction in trade and other receivables partly offset those movements. Direct tax payments of Rs 1.56 crore then took the operating cash outflow to Rs 12.93 crore. Cash and cash equivalents were Rs 3.27 crore at September 30, compared with Rs 3.36 crore at the beginning of the financial year.

Investing activities used Rs 6.61 crore, including Rs 6.92 crore of net fixed-asset purchases. Financing activities generated Rs 19.45 crore through increased bank borrowing, compared with a Rs 36.69 crore inflow a year earlier, when financing included Rs 38.34 crore of net proceeds from issuing share capital.

How much of Eppeltone’s IPO proceeds remained unutilised?

Eppeltone disclosed Rs 1.91 crore of unutilised initial public offering proceeds as of September 30, 2026, out of Rs 43.96 crore raised. It reported utilisation of Rs 43.14 crore. The company issued 34.34 lakh equity shares at Rs 128 each and listed on the NSE Emerge platform on June 24, 2025.

The full Rs 30 crore earmarked for working-capital requirements had been used. Of the Rs 5 crore allocated for additional factory machinery, Rs 3.25 crore had been utilised and Rs 1.75 crore remained unutilised. The auditor’s certificate says Rs 5.70 lakh of that unutilised amount was temporarily parked in an HDFC Bank fixed deposit, with the balance held in an HDFC current account.

Issue expenses were reported at Rs 5.53 crore against Rs 4.59 crore estimated in the offer document. The utilisation certificate says Rs 93.60 lakh of expenditure above the estimate was met from the general corporate purpose allocation, while Rs 15.75 lakh remained payable to bankers to the issue and was held in an escrow account.

Conclusion

Eppeltone’s September 2026 half-year results show that revenue growth did not produce higher post-tax profit or positive operating cash flow. Revenue from operations rose to Rs 50.14 crore, but expenses increased faster, current tax was higher, inventory expanded to Rs 70.76 crore and lower trade payables contributed to a Rs 12.93 crore operating cash outflow.

The disclosed item to watch next is utilisation of the Rs 1.75 crore remaining from the initial public offering allocation for additional factory machinery as of September 30, 2026. Subsequent statements will also show whether the increase in long-term borrowings to Rs 35.94 crore, capital work in progress of Rs 4.15 crore and higher inventory alter operating cash generation.