Himatsingka Seide September profit falls 66% as margins narrow

Himatsingka Seide Limited reported consolidated profit of Rs 14.20 crore for the quarter ended September 30, 2026, down 66% from Rs 42 crore a year earlier, as operating margin fell to 12.08% from 22.15%. Himatsingka Seide’s revenue from operations declined only 1% year on year to Rs 624.52 crore.

Why did Himatsingka Seide’s September-quarter profit fall?

Himatsingka Seide’s September-quarter profit fell as profit before tax declined to Rs 4.94 crore from Rs 64.01 crore a year earlier, while revenue was broadly stable. Revenue from operations was Rs 624.52 crore in the quarter ended September 30, 2026, compared with Rs 629.57 crore in the September 2025 quarter and Rs 621.30 crore in the June 2026 quarter.

The fall in pre-tax profit reflected lower other income and higher total expenses. Other income declined to Rs 44.31 crore from Rs 77.70 crore a year earlier, while total expenses rose to Rs 663.89 crore from Rs 643.27 crore. Total income consequently declined to Rs 668.83 crore from Rs 707.28 crore, leaving a narrower pre-tax surplus.

Profit after tax exceeded profit before tax in the latest quarter because Himatsingka Seide recorded a net tax credit of Rs 9.26 crore. Current tax of Rs 15.03 crore was more than offset by a deferred-tax credit of Rs 24.30 crore. In the September 2025 quarter, tax expense was Rs 21.81 crore and the group’s share of associate loss was Rs 20.13 lakh.

How much did Himatsingka Seide’s operating margin narrow?

Himatsingka Seide’s operating margin narrowed 10.07 percentage points year on year to 12.08% in the September 2026 quarter from 22.15% in the September 2025 quarter. The margin was above 11.59% in the immediately preceding June 2026 quarter, but below the 16.40% reported for the year ended March 31, 2026.

The filing defines operating margin as earnings before interest and tax divided by revenue from operations. Total expenses increased by Rs 20.63 crore year on year even as revenue decreased by Rs 5.05 crore. Raw-material and packing-material consumption rose to Rs 305.22 crore from Rs 301.28 crore, while purchases of stock-in-trade increased to Rs 132.89 crore from Rs 127.90 crore.

Net profit margin was 0.79%, compared with 10.17% a year earlier and 1.31% in the June 2026 quarter. Finance costs declined to Rs 70.51 crore from Rs 75.45 crore, and depreciation and amortisation fell to Rs 25.65 crore from Rs 37.32 crore. Those declines did not offset the reduction in other income and the increase in total expenses.

Himatsingka Seide classifies its operations as a single textile segment under Indian Accounting Standard 108. The September 2026 filing therefore provides no separate revenue or profitability figures by textile product category, geography or subsidiary to explain the margin movement further.

What do Himatsingka Seide’s half-year earnings and cash flows show?

Himatsingka Seide reported six-month revenue from operations of Rs 1,245.83 crore for the period ended September 30, 2026, down from Rs 1,286.51 crore in the corresponding prior-year period. Profit for the six months fell to Rs 19.19 crore from Rs 52.89 crore, while operating margin declined to 11.83% from 17.56%.

Net cash generated from operating activities was Rs 67.11 crore in the six months ended September 30, 2026, compared with Rs 180.65 crore a year earlier. Trade receivables increased by Rs 108.78 crore in the latest half year, compared with a decrease of Rs 19.65 crore in the prior-year period, while inventories increased by Rs 48.90 crore after a Rs 54.56 crore increase a year earlier.

Loss allowance on financial assets rose to Rs 44.86 crore from Rs 5.99 crore in the prior-year half. Cash generated from operations before income taxes declined to Rs 68.19 crore from Rs 186.38 crore, including a Rs 81.17 crore reduction in trade payables, against a Rs 8.58 crore reduction a year earlier.

Cash and cash equivalents stood at Rs 24.37 crore at September 30, 2026, down from Rs 46.66 crore at the beginning of the financial year. Net cash used in financing activities was Rs 65.33 crore, including Rs 168.88 crore of interest paid and Rs 191.20 crore of repayments of non-current borrowings.

How did Himatsingka Seide’s debt and working capital change?

Himatsingka Seide’s consolidated assets increased to Rs 6,013.49 crore at September 30, 2026 from Rs 5,900.84 crore at March 31, 2026. Inventories rose to Rs 1,281.15 crore from Rs 1,223.72 crore, while trade receivables increased to Rs 1,271.75 crore from Rs 1,191.69 crore over the six-month period.

Consolidated equity increased to Rs 2,189.49 crore from Rs 2,140.74 crore at March 31, 2026. Non-current borrowings rose to Rs 1,337.02 crore from Rs 1,296.98 crore, and current borrowings increased to Rs 1,378.24 crore from Rs 1,322.29 crore.

The debt-equity ratio was 1.26 at September 30, 2026, compared with 1.23 a year earlier and 1.24 at March 31, 2026. Interest-service coverage was 1.07, down from 1.85 a year earlier, while debt-service coverage was 1.11 against 1.49. The filing defines interest-service coverage as earnings before interest and tax divided by finance cost.

During the half year, Himatsingka Seide issued 34,000 senior, unsecured, rated, listed, redeemable and taxable non-convertible debentures through private placement. The debentures had an issue price of Rs 10,000 each and aggregated Rs 34 crore, and were listed on BSE Limited.

Conclusion

Himatsingka Seide’s September-quarter result shows that relatively stable revenue did not prevent a sharp earnings decline. Lower other income, higher expenses and a 10.07-percentage-point year-on-year reduction in operating margin reduced profit before tax to Rs 4.94 crore, while a Rs 9.26 crore net tax credit lifted reported profit to Rs 14.20 crore.

Investors can watch the proposed capitalisation of a portion of receivables from Himatsingka America Inc., which the board approved on November 14, 2026 subject to Reserve Bank of India approval. The evolution of receivables, inventories, operating cash generation and borrowings will also remain relevant after receivables reached Rs 1,271.75 crore and cash and cash equivalents declined to Rs 24.37 crore at September 30, 2026.