Fractal Industries posts ₹7.11 crore profit as cash flow falls

Fractal Industries Limited reported consolidated profit after tax of ₹7.11 crore for the half year ended 30 September 2026, while net operating cash flow was negative ₹9.78 crore after inventories increased by ₹14.66 crore. Cash and cash equivalents fell ₹16.18 crore during the half year to ₹15.14 crore.

What profit did Fractal Industries report for September 2026?

Fractal Industries reported consolidated profit after tax of ₹7.11 crore for the half year ended 30 September 2026. Profit before tax was ₹8.61 crore, while current tax was ₹1.50 crore and deferred tax was ₹2.10 lakh, producing total tax expense of ₹1.50 crore.

The board approved the unaudited consolidated results on 6 November 2026 after they were reviewed and recommended by the audit committee. The statutory auditor conducted a limited review, rather than an audit, and said nothing had come to its attention to indicate that the statement was materially misstated.

Fractal Industries reported profit before tax of ₹7.62 crore for the half year ended 31 March 2026. The September 2026 pre-tax profit was therefore ₹99.36 lakh higher than the preceding half-year figure, although the company describes the March 2026 result as a balancing figure derived from the audited annual results and the audited six-month figures to 30 September 2025.

The consolidated statement covers Fractal Industries and subsidiaries Nested Brands Private Limited and Bishwanath Kashinath Foundation. The auditor did not review the subsidiaries' interim information; management supplied it. The subsidiaries reported revenue of ₹9.13 lakh and ₹8 lakh respectively, while Nested Brands reported a loss after tax of ₹31,000 and Bishwanath Kashinath Foundation reported nil profit or loss.

Why did Fractal Industries' operating cash flow turn negative?

Fractal Industries used ₹9.78 crore in operating activities during the half year ended 30 September 2026, compared with cash generated from operations of ₹3.06 crore in the half year ended 30 September 2025. This occurred despite operating profit before working-capital changes of ₹8.66 crore in the latest period.

The largest cash use was a ₹14.66 crore increase in inventories, compared with a ₹5.68 crore increase in the comparable prior-year half. The inventory movement exceeded operating profit before working-capital changes by ₹6.00 crore and was the main reason cash generated from operations moved to negative ₹8.39 crore from positive ₹5.20 crore.

Trade receivables increased by ₹70.17 lakh and short-term loans and advances increased by ₹2.27 crore. Other current assets rose by ₹3.02 lakh and non-current assets by ₹1.50 lakh. Those uses of cash were partly offset by a ₹65.98 lakh increase in trade payables and an ₹11.84 lakh increase in other current liabilities.

Income tax paid was ₹1.38 crore in the latest half year, compared with ₹2.14 crore a year earlier. The cash-flow statement was prepared using the indirect method under Accounting Standard 3, which starts with profit before tax and adjusts for non-cash items and working-capital movements.

How did Fractal Industries' financial position change by September 2026?

Fractal Industries reported total consolidated assets of ₹100.64 crore at 30 September 2026, compared with ₹98.56 crore at 31 March 2026. Inventories rose to ₹53.76 crore from ₹39.09 crore over that period, matching the ₹14.66 crore inventory increase reported in the operating cash-flow statement.

Cash and cash equivalents declined to ₹15.14 crore at 30 September 2026 from ₹31.33 crore at 31 March 2026. The closing balance comprised fixed deposits of ₹9.99 crore, bank balances of ₹5.14 crore and cash in hand of ₹1.51 lakh.

Trade receivables increased to ₹6.91 crore from ₹6.21 crore, while short-term loans and advances rose to ₹12.28 crore from ₹10.00 crore. The combined changes in inventories, receivables and short-term advances show that more funds were held in current assets at the half-year date.

Short-term borrowings fell to ₹6.47 crore from ₹9.48 crore, and long-term borrowings declined to ₹2.70 crore from ₹3.13 crore. Share capital remained ₹7.84 crore, while reserves and surplus increased to ₹72.88 crore from ₹65.92 crore. Minority interest moved from negative ₹14.89 lakh to nil.

Where did Fractal Industries use cash outside operations?

Fractal Industries used ₹8.09 lakh in investing activities and ₹6.32 crore in financing activities during the half year ended 30 September 2026. Investing outflows included ₹72.69 lakh spent on property, plant and equipment, including capital advances, and a ₹4.38 lakh advance for capital goods; interest income of ₹68.98 lakh partly offset those uses.

Financing cash outflow included repayment of ₹42.61 lakh of long-term borrowings, ₹5.38 crore of short-term borrowings and ₹51.32 lakh of finance costs. There were no proceeds from equity issuance in the latest half year, compared with ₹1.12 crore of equity-share proceeds in the half year ended 30 September 2025.

Fractal Industries states that it designs, sources and manufactures garments and provides end-to-end warehousing and supply-chain services to e-commerce platforms. Its reported cash reduction of ₹16.18 crore combines the ₹9.78 crore operating outflow, ₹8.09 lakh investing outflow and ₹6.32 crore financing outflow.

The company also disclosed that it had fully utilised ₹49.00 crore of initial public offering proceeds by 30 September 2026. The disclosed uses included ₹36.50 crore for working-capital requirements, ₹7.47 crore for general corporate purposes and ₹5.03 crore for issue-related expenses.

Conclusion

Fractal Industries remained profitable in the half year to 30 September 2026, reporting ₹7.11 crore of consolidated profit after tax. However, the increase in inventory to ₹53.76 crore, alongside higher receivables and short-term advances, absorbed cash and moved operating cash flow from a ₹3.06 crore inflow a year earlier to a ₹9.78 crore outflow.

The unresolved matter for subsequent reporting periods is whether the ₹14.66 crore inventory build-up and the ₹2.27 crore increase in short-term loans and advances reverse through operating cash generation. The filing also shows that all ₹49.00 crore of IPO proceeds, including ₹36.50 crore allocated to working capital, had been utilised by 30 September 2026.