Flex Foods equity turns negative after Rs 13.70 crore deficit

FLEX FOODS LIMITED reported total equity of negative Rs 1.25 crore at September 30, 2026, compared with positive Rs 9.22 crore at March 31, 2026, as other equity moved to a Rs 13.70 crore deficit following a Rs 10.47 crore half-year loss.

Why did Flex Foods' equity turn negative?

Flex Foods' equity turned negative because its accumulated balance in other equity fell from negative Rs 3.23 crore at March 31, 2026 to negative Rs 13.70 crore at September 30, 2026. Its paid-up equity share capital remained unchanged at Rs 12.45 crore, but that capital was insufficient to offset the larger other-equity deficit.

The reported movement in other equity was Rs 10.47 crore over the six months, the same as Flex Foods' net loss after tax for the half year ended September 30, 2026. The company reported no other comprehensive income for that six-month period, while total comprehensive loss was also Rs 10.47 crore. Total equity therefore changed from positive Rs 9.22 crore to negative Rs 1.25 crore.

The balance sheet still balanced at total assets and total equity plus liabilities of Rs 391.89 crore at September 30, 2026. Total assets were down Rs 16.07 crore from Rs 407.96 crore at March 31, with non-current assets declining to Rs 273.32 crore from Rs 278.49 crore and current assets declining to Rs 118.57 crore from Rs 129.47 crore.

What were Flex Foods' latest losses and revenue?

Flex Foods recorded a net loss after tax of Rs 10.47 crore for the half year ended September 30, 2026, compared with a Rs 21.44 crore loss in the corresponding half of the previous year. Revenue from operations rose to Rs 94.24 crore from Rs 89.67 crore, while total expenses fell to Rs 107.83 crore from Rs 118.86 crore.

The smaller half-year loss reflects a reduced loss before tax of Rs 13.15 crore, compared with Rs 28.74 crore a year earlier. Finance cost nevertheless increased to Rs 13.20 crore from Rs 12.97 crore, and power and fuel expense rose to Rs 20.25 crore from Rs 17.97 crore. Employee benefits expense was Rs 15.27 crore, compared with Rs 14.20 crore in the prior-year half.

The September quarter was weaker than the immediately preceding June quarter. Flex Foods posted a net loss of Rs 9.15 crore in the quarter ended September 30, 2026, versus Rs 1.32 crore in the June quarter, as total income declined to Rs 34.57 crore from Rs 60.11 crore and total expenses were Rs 46.07 crore against Rs 61.76 crore.

Against the September 2025 quarter, the September 2026 loss after tax increased from Rs 8.48 crore to Rs 9.15 crore. Revenue from operations, however, fell to Rs 34.50 crore from Rs 49.18 crore. Basic and diluted loss per share was Rs 7.35 for the September 2026 quarter, compared with a loss per share of Rs 6.81 a year earlier.

How did Flex Foods' borrowing profile change?

Flex Foods shifted part of its borrowing balance toward current liabilities during the six months to September 30, 2026. Non-current borrowings fell by Rs 22.24 crore to Rs 191.59 crore, while current borrowings increased by Rs 13.02 crore to Rs 105.84 crore, from Rs 92.82 crore at March 31, 2026.

The cash-flow statement records net repayment of non-current borrowings of Rs 22.24 crore and net proceeds from current borrowings of Rs 13.02 crore during the half year. Financing activities used Rs 22.66 crore, compared with cash generated of Rs 11.15 crore in the corresponding half of 2025, after Rs 13.16 crore of interest and finance charges and Rs 0.28 crore of lease-liability payments.

Aggregate borrowings, calculated from the reported current and non-current balances, declined to Rs 297.43 crore at September 30 from Rs 306.65 crore at March 31. Lease liabilities added Rs 0.66 crore at September 30, comprising Rs 0.13 crore of non-current lease liabilities and Rs 0.53 crore of current lease liabilities.

What changed in Flex Foods' working-capital balances?

Flex Foods' dues to micro and small enterprises rose to Rs 24.33 crore at September 30, 2026 from Rs 9.57 crore at March 31, 2026. At the same time, trade payables to creditors other than micro and small enterprises declined to Rs 14.25 crore from Rs 32.33 crore.

The two trade-payable categories combined were Rs 38.58 crore at September 30, compared with Rs 41.90 crore at March 31. Other financial liabilities increased to Rs 38.79 crore from Rs 31.98 crore, while total current liabilities rose to Rs 198.37 crore from Rs 181.58 crore. Other current liabilities were broadly stable at Rs 8.72 crore against Rs 8.67 crore.

On the asset side, inventories increased to Rs 58.79 crore from Rs 50.34 crore during the six months. Trade receivables fell to Rs 30.35 crore from Rs 52.20 crore, and cash and cash equivalents declined to Rs 1.22 crore from Rs 1.78 crore on the balance sheet. The cash-flow statement showed cash and cash equivalents of Rs 1.37 crore at September 30, including Rs 0.15 crore in specified restricted or designated balances.

The half-year cash-flow statement shows a Rs 8.45 crore increase in inventories and a Rs 18.69 crore decrease in trade receivables, current financial assets and other current assets. It also reports a Rs 3.76 crore increase in trade payables, financial liabilities, other liabilities and current provisions, indicating that several working-capital accounts moved materially alongside the loss for the period.

Conclusion

Flex Foods entered negative total equity at September 30, 2026 because a Rs 10.47 crore half-year comprehensive loss widened other equity's deficit to Rs 13.70 crore. Revenue from operations increased year on year in the half year and the net loss narrowed from Rs 21.44 crore, but the September quarter produced a Rs 9.15 crore loss and total equity was negative Rs 1.25 crore.

What remains unresolved in the disclosed figures is whether subsequent results can limit further losses while current borrowings stand at Rs 105.84 crore and dues to micro and small enterprises are Rs 24.33 crore. The statutory auditors completed a limited review of the September 30, 2026 quarter and half-year results, which the board approved on November 11, 2026.