Fredun Pharmaceuticals Limited cash fell Rs 9.61 crore in first half

Fredun Pharmaceuticals Limited reported consolidated profit after tax of Rs 31.71 crore for the half year ended 30 September 2026, but cash and bank balances declined by Rs 9.61 crore as inventory increased by Rs 102.72 crore and purchases of fixed assets totalled Rs 41.86 crore. In the comparable half year, cash increased by Rs 7.53 crore.

Why did Fredun Pharmaceuticals’ cash fall in the first half?

Fredun Pharmaceuticals’ cash and bank balance fell because fixed-asset purchases exceeded cash generated from operations and net financing inflows in the half year ended 30 September 2026. Net cash from operating activities was Rs 17.53 crore, investing activities used Rs 41.71 crore after fixed-asset sale proceeds, and financing activities generated Rs 14.56 crore.

Cash and bank balances declined from Rs 64.98 crore at 31 March 2026 to Rs 55.37 crore at 30 September 2026. The cash-flow statement showed a Rs 9.61 crore net decrease, whereas the corresponding half year ended 30 September 2025 recorded a Rs 7.53 crore increase in cash to Rs 7.98 crore.

The consolidated cash-flow statement uses the indirect method under Indian Accounting Standard 7, Statement of Cash Flows. Under that presentation, Fredun Pharmaceuticals began with after-tax profit of Rs 31.71 crore, made adjustments including Rs 7.49 crore of depreciation and Rs 17.39 crore of interest paid, and then accounted for working-capital movements.

How much cash did Fredun Pharmaceuticals’ inventory build-up absorb?

Fredun Pharmaceuticals’ inventory increase absorbed Rs 102.72 crore of cash in the latest half year, compared with Rs 49.45 crore in the half year ended 30 September 2025. Consolidated inventories rose from Rs 269.80 crore at 31 March 2026 to Rs 372.53 crore at 30 September 2026.

The inventory movement was the largest disclosed working-capital outflow and exceeded operating profit before working-capital changes of Rs 74.14 crore. Total working-capital changes reduced cash by Rs 56.54 crore, compared with a Rs 21.55 crore reduction in the prior-year half, before a Rs 0.07 crore reduction related to long-term provisions.

Trade receivables used Rs 4.35 crore of cash, rising from Rs 92.69 crore to Rs 97.03 crore during the six months. Other current assets used Rs 6.26 crore, while trade payables provided Rs 35.05 crore and other financial assets provided Rs 39.68 crore, partly offsetting the inventory-related cash requirement.

The income statement recorded a negative Rs 54.07 crore in changes in inventories of finished goods, work in progress and stock in trade, against a negative Rs 2.25 crore a year earlier. That income-statement line is separate from the Rs 102.72 crore cash-flow movement, but both reported measures identify inventory as a material part of the first-half accounts.

How did Fredun Pharmaceuticals’ fixed-asset purchases change?

Fredun Pharmaceuticals purchased fixed assets worth Rs 41.86 crore in the half year ended 30 September 2026, more than double the Rs 20.74 crore purchased in the corresponding 2025 period. The company also reported Rs 15.55 lakh of proceeds from sale of fixed assets, resulting in a net fixed-asset investing outflow of Rs 41.71 crore.

Property, plant and equipment stood at Rs 151.84 crore at 30 September 2026, compared with Rs 117.63 crore at 31 March 2026. The Rs 34.21 crore increase in that balance was lower than purchase cash spending, while the cash-flow statement included depreciation of Rs 7.49 crore for the six-month period.

Total non-current assets increased to Rs 211.01 crore from Rs 143.91 crore over the same period. Other non-current assets rose to Rs 26.49 crore from Rs 7.68 crore, while other financial assets increased to Rs 29.46 crore from Rs 15.96 crore; the cash-flow statement separately recorded Rs 18.76 crore relating to other non-current assets.

Fredun Pharmaceuticals reported one operating segment, pharmaceutical and healthcare. The filing does not identify a project, facility, product line or expected completion date for the Rs 41.86 crore of fixed-asset purchases, so the published half-year accounts do not specify the intended use of that expenditure.

Did Fredun Pharmaceuticals’ profit and operating cash flow improve?

Fredun Pharmaceuticals increased both first-half profit and operating cash flow, although working-capital movements limited cash conversion. Consolidated profit after tax rose to Rs 31.71 crore from Rs 16.20 crore, while net cash from operating activities increased to Rs 17.53 crore from Rs 13.50 crore.

Net sales increased to Rs 493.61 crore from Rs 262.99 crore, and total income from operations rose to Rs 495.88 crore from Rs 265.15 crore. Total expenses increased to Rs 445.68 crore from Rs 243.40 crore, leaving profit before tax of Rs 50.20 crore compared with Rs 21.75 crore in the previous first half.

Tax expense rose to Rs 18.50 crore from Rs 5.55 crore, while finance costs increased to Rs 17.39 crore from Rs 14.26 crore. Depreciation and amortisation expense increased to Rs 7.50 crore from Rs 3.31 crore in the income statement, alongside the higher property, plant and equipment balance.

Cash generated before working-capital changes reached Rs 74.14 crore, up from Rs 33.48 crore in the prior-year half. After working-capital movements, tax provisions and long-term provisions, Fredun Pharmaceuticals reported Rs 17.53 crore of net operating cash flow, an increase of Rs 4.03 crore year on year.

How did Fredun Pharmaceuticals fund its cash requirements?

Fredun Pharmaceuticals recorded a net financing cash inflow of Rs 14.56 crore in the latest half year, marginally below Rs 14.76 crore a year earlier. Long-term borrowings increased by Rs 30.62 crore, while short-term borrowings decreased by Rs 0.29 crore and interest paid amounted to Rs 17.39 crore.

Non-current borrowings rose to Rs 86.93 crore at 30 September 2026 from Rs 56.31 crore at 31 March 2026. Current borrowings were broadly unchanged at Rs 165.80 crore, compared with Rs 166.09 crore at the start of the period, while trade and other payables increased to Rs 122.63 crore from Rs 87.58 crore.

Financing cash flows also included Rs 19.91 crore from issue of share premium, Rs 0.93 crore from issue of share warrants and Rs 16.05 lakh from issue of share capital. The company paid Rs 35.13 lakh in dividends during the half year, according to the consolidated cash-flow statement.

The company allotted 1,60,533 equity shares through conversion of 1,60,533 warrants during the half year. It also allotted 1,10,25,380 fully paid bonus equity shares on 16 July 2026 in a two-for-one ratio, and retrospectively adjusted comparative earnings per share under Indian Accounting Standard 33, Earnings per Share.

Conclusion

Fredun Pharmaceuticals generated higher profit and operating cash in the half year ended 30 September 2026, but the Rs 102.72 crore inventory increase and Rs 41.86 crore of fixed-asset purchases outweighed those inflows. The result was a Rs 9.61 crore decrease in cash and bank balances, reversing the Rs 7.53 crore increase reported in the comparable prior-year half.

The next results will show whether inventory of Rs 372.53 crore at 30 September 2026 stabilises, declines or requires further funding, and whether fixed-asset purchases continue after the latest Rs 41.86 crore outlay. The filing provides no capital-expenditure target, project timetable or stated use for the assets acquired, leaving those matters unresolved.