Hindustan Adhesives Q2 profit drops 81% as costs rise

Hindustan Adhesives Limited reported consolidated profit of Rs 1.23 crore for the quarter ended September 30, 2026, down 81% from Rs 6.52 crore a year earlier, despite a 10% rise in revenue from operations to Rs 72.71 crore. Total expenses increased faster than total revenue, reducing profit before tax to Rs 2.33 crore.

Why did Hindustan Adhesives’ Q2 profit fall despite higher sales?

Hindustan Adhesives’ September 2026-quarter profit fell because its total expenses rose by Rs 12.80 crore year-on-year, more than the Rs 6.77 crore increase in total revenue. Profit for the period declined to Rs 1.23 crore from Rs 6.52 crore in the quarter ended September 30, 2025, while profit before tax fell to Rs 2.33 crore from Rs 8.36 crore.

Revenue from operations increased by Rs 6.84 crore to Rs 72.71 crore from Rs 65.87 crore, and other income was Rs 1.11 crore against Rs 1.18 crore a year earlier. This took total revenue to Rs 73.82 crore, compared with Rs 67.05 crore. Total expenses, however, reached Rs 71.49 crore from Rs 58.69 crore, leaving a narrower surplus before tax.

Tax expense declined to Rs 1.10 crore in the September 2026 quarter from Rs 1.84 crore a year earlier, but the reduction did not offset the Rs 6.03 crore fall in profit before tax. Basic earnings per equity share, on shares with a face value of Rs 10 each, declined to Rs 2.38 from Rs 12.73. Hindustan Adhesives reported one business segment, so the filing provides no segment-level explanation for the lower quarterly earnings.

Which costs changed most for Hindustan Adhesives in Q2?

Hindustan Adhesives’ other expenses rose by Rs 5.61 crore to Rs 18.32 crore in the September 2026 quarter, representing the largest disclosed year-on-year cost increase. The filing does not provide a further breakdown of this line, which was Rs 12.71 crore in the comparable September 2025 quarter.

Employee benefits expense increased to Rs 6.45 crore from Rs 5.38 crore, finance costs rose to Rs 2.37 crore from Rs 1.43 crore, and depreciation and amortisation increased to Rs 4.14 crore from Rs 2.49 crore. Changes in inventories of finished goods, stock in trade and work in progress were an expense of Rs 4.54 crore, compared with a credit of Rs 1.56 crore in the prior-year quarter.

Cost of materials consumed moved in the opposite direction, falling to Rs 34.84 crore from Rs 38.24 crore. Purchase stock transfer was Rs 83 lakh in the September 2026 quarter, whereas no amount is shown for that line in the September 2025 column. Taken together, the disclosed movements meant expenses expanded despite the lower material-consumption cost.

How did Hindustan Adhesives perform in the first half?

Hindustan Adhesives’ consolidated profit for the half year ended September 30, 2026 increased 25% to Rs 11.87 crore from Rs 9.46 crore in the corresponding prior-year half. Revenue from operations rose 16% to Rs 152.55 crore from Rs 131.04 crore, showing that the first-half result remained ahead of the prior period despite the September-quarter decline.

Total revenue for the half year was Rs 154.13 crore, compared with Rs 133.05 crore a year earlier, while total expenses rose to Rs 136.85 crore from Rs 120.38 crore. Profit before tax increased to Rs 17.28 crore from Rs 12.67 crore. Tax expense was Rs 5.41 crore, compared with Rs 3.21 crore in the half year ended September 30, 2025.

The June 2026 quarter accounted for Rs 10.64 crore of first-half profit, compared with Rs 1.23 crore in the September 2026 quarter. Revenue from operations also declined sequentially to Rs 72.71 crore in September from Rs 79.84 crore in June. Other income rose sequentially to Rs 1.11 crore from Rs 47 lakh, while total expenses increased to Rs 71.49 crore from Rs 65.36 crore.

What do Hindustan Adhesives’ balance sheet and cash flows show?

Hindustan Adhesives reported consolidated total assets of Rs 287.18 crore at September 30, 2026, compared with Rs 287.89 crore at March 31, 2026. Total equity increased to Rs 120.53 crore from Rs 108.85 crore, comprising unchanged equity share capital of Rs 5.12 crore and other equity of Rs 115.41 crore.

Current borrowings declined to Rs 69.38 crore at September 30, 2026 from Rs 83.57 crore at March 31, 2026, while non-current borrowings were Rs 17.84 crore compared with Rs 18.59 crore. Inventories were Rs 62.10 crore at September 30, against Rs 63.73 crore at the preceding year-end. Trade receivables rose to Rs 38.20 crore from Rs 30.93 crore.

For the half year ended September 30, 2026, Hindustan Adhesives reported net cash from operating activities of Rs 21.99 crore. Net cash used in investing activities was Rs 1.37 crore and net cash used in financing activities was Rs 20.98 crore, resulting in a Rs 36 lakh decrease in cash and cash equivalents. Closing cash and cash equivalents were Rs 57 lakh, versus Rs 93 lakh at March 31, 2026.

What did the limited review say about Hindustan Adhesives’ results?

Hindustan Adhesives’ consolidated unaudited results were reviewed by Salarpuria & Partners, whose report is dated November 14, 2026. The reviewer said nothing had come to its attention to indicate that the statement failed to disclose the required information or contained a material misstatement, while also stating that the work was a limited review and not an audit.

The consolidated results include Bagla Technopack Private Limited and PT. Bagla Group Indonesia. For the September 2026 quarter, Bagla Technopack reported revenue of Rs 6.66 crore and a net loss of Rs 3.32 crore; its financial information was reviewed by other auditors. PT. Bagla Group Indonesia reported revenue of Rs 2.91 crore and profit after tax of Rs 4.73 lakh, based on information furnished by management rather than reviewed by its auditors.

The reviewer stated that PT. Bagla Group Indonesia was not material to the group. Hindustan Adhesives’ board approved the unaudited results, and the filing says that the financial statements were prepared under Indian Accounting Standards, including Indian Accounting Standard 34 on interim financial reporting.

Conclusion

Hindustan Adhesives increased revenue in the September 2026 quarter and the first half ended September 30, 2026, but the quarterly outcome differed sharply from the half-year result. September-quarter profit fell to Rs 1.23 crore as total expenses rose to Rs 71.49 crore, while first-half profit increased to Rs 11.87 crore, supported by the June 2026-quarter profit of Rs 10.64 crore.

The next results will show whether revenue from operations recovers from Rs 72.71 crore in the September quarter and whether other expenses of Rs 18.32 crore and the Rs 4.54 crore inventory-related expense persist. The filing does not disclose a formal earnings target or operating plan, leaving future cost movements and the performance of Bagla Technopack, which reported a Rs 3.32 crore quarterly loss, as unresolved matters to monitor.