Godfrey Phillips cash flow nearly doubles to Rs 1,031 crore

Godfrey Phillips India Limited generated Rs 1,031.06 crore of standalone net cash from operating activities in the half year ended September 30, 2026, up from Rs 524.08 crore a year earlier, as a Rs 917.26 crore rise in payables, liabilities and provisions outweighed cash absorbed by inventory growth and lower pre-tax profit.

How much operating cash did Godfrey Phillips generate in H1?

Godfrey Phillips generated Rs 1,031.06 crore of net operating cash in the half year ended September 30, 2026, compared with Rs 524.08 crore in the corresponding half of 2025. Cash generated from operating activities before tax was Rs 1,129.70 crore, and net income-tax payments were Rs 98.64 crore.

The unaudited standalone cash-flow statement was prepared under the indirect method set out in Indian Accounting Standard 7, or Ind AS 7, on cash-flow statements. The board took the half-year results on record on November 5, 2026, covering the period from April 1, 2026 to September 30, 2026.

Operating profit before working-capital changes fell by Rs 249.08 crore from the prior-year half, but working capital changed from a Rs 4.45 crore outflow to a Rs 702.50 crore inflow. That Rs 706.95 crore year-on-year change more than offset the lower operating-profit measure and lifted net operating cash by Rs 506.98 crore.

What drove Godfrey Phillips’ working-capital inflow?

Godfrey Phillips’ largest working-capital cash source was a Rs 917.26 crore increase in trade payables, other financial liabilities, other liabilities and provisions, against a Rs 461.46 crore increase a year earlier. The latest-period increase was Rs 455.80 crore higher and exceeded the Rs 209.72 crore cash outflow from inventory growth.

Inventories absorbed Rs 209.72 crore in the first half of 2026-27, compared with Rs 581.99 crore in the corresponding prior-year half. Receivables, loans, other financial assets and other assets used a further Rs 5.04 crore, whereas those items had supplied Rs 116.08 crore in the prior-year period.

The September 30 balance sheet shows inventories of Rs 2,663.97 crore, up from Rs 2,188.49 crore at March 31, 2026. Trade payables owed to creditors other than micro and small enterprises rose to Rs 848.04 crore from Rs 517.78 crore, while other current liabilities increased to Rs 1,650.15 crore from Rs 801.85 crore.

Why did Godfrey Phillips’ cash flow rise as profit declined?

Godfrey Phillips’ profit before tax from continuing operations fell to Rs 447.39 crore in the half year ended September 30, 2026 from Rs 836.88 crore a year earlier, while net operating cash increased to Rs 1,031.06 crore from Rs 524.08 crore. The difference primarily reflects the Rs 702.50 crore working-capital inflow in the latest half against a Rs 4.45 crore outflow in the prior period.

Profit after tax from continuing operations was Rs 340.37 crore, compared with Rs 669.42 crore in the prior-year half. The cash-flow reconciliation included Rs 70.91 crore of depreciation, impairment and amortisation, up from Rs 55.30 crore, and Rs 8.21 crore of employee share-based payment expense, down from Rs 16.37 crore.

Other income in the income statement declined to Rs 133.96 crore from Rs 259.54 crore. Within the cash-flow reconciliation, dividend income was Rs 12.40 crore versus Rs 145.33 crore, while net gains on sale, redemption or fair-value movements of long-term investments were Rs 67.02 crore versus Rs 79.64 crore.

What were Godfrey Phillips’ investing and financing cash flows?

Godfrey Phillips used Rs 423.19 crore in investing activities and Rs 536.45 crore in financing activities during the half year ended September 30, 2026. The respective outflows were Rs 147.89 crore and Rs 331.37 crore a year earlier, resulting in a Rs 71.42 crore net increase in cash and cash equivalents during the latest half.

Purchases of current and non-current investments totalled Rs 9,325.58 crore, while sale and redemption proceeds were Rs 9,021.11 crore. Spending on property, plant and equipment, capital work in progress, investment properties and intangible assets was Rs 142.27 crore, compared with Rs 102.43 crore in the prior-year half.

Financing cash outflow included Rs 512.53 crore of dividends paid, up from Rs 310.70 crore, Rs 17.64 crore of lease-liability payments and Rs 5.86 crore of interest paid. Cash and cash equivalents were Rs 7.06 crore at September 30, 2026, but the cash-flow definition also included Rs 16.27 crore in restricted earmarked accounts and a Rs 34.47 crore overdraft, resulting in a Rs 11.14 crore net deficit.

How did Godfrey Phillips’ reported operating performance change?

Godfrey Phillips reported revenue from operations of Rs 8,017.10 crore for the half year ended September 30, 2026, compared with Rs 3,440.03 crore a year earlier. The company said a February 1, 2026 revision in the indirect-tax structure on cigarettes significantly affected the composition of customer revenue and excise duty, making those figures not comparable with earlier periods.

Excise duty was Rs 5,469.99 crore in the latest half, compared with Rs 670.24 crore a year earlier. The Cigarettes, Tobacco and related Products segment reported revenue of Rs 7,942.16 crore and segment result of Rs 315.58 crore, versus Rs 3,387.33 crore and Rs 574.57 crore respectively in the prior-year half.

The Others segment reported revenue of Rs 74.94 crore and a segment result of Rs 3.41 crore, compared with Rs 52.70 crore and Rs 4.34 crore a year earlier. Total standalone assets rose to Rs 8,093.17 crore at September 30, 2026 from Rs 7,344.57 crore at March 31, while liabilities increased to Rs 2,899.39 crore from Rs 1,981.95 crore.

Conclusion

Godfrey Phillips’ first-half operating cash generation increased despite lower continuing-operations profit because liabilities and payables supplied substantially more cash and inventory required less cash than in the corresponding prior-year half. The Rs 1,031.06 crore operating-cash figure therefore reflected the change in working capital as well as operating performance and non-cash adjustments.

The next disclosed event is the November 12, 2026 record date for the interim dividend. The second-half movement in inventories of Rs 2,663.97 crore and other current liabilities of Rs 1,650.15 crore at September 30 will indicate whether the working-capital movements that supported first-half cash flow persist.