HLE Glascoat operating cash flow falls 81% to Rs 14.10 crore

HLE Glascoat Limited reported net cash from operating activities of Rs 14.10 crore for the half year ended September 30, 2026, down 81% from Rs 74.58 crore a year earlier, as inventories absorbed Rs 84.18 crore of cash. The inventory increase outweighed a Rs 18.55 crore release from trade receivables and contributed to lower cash balances.

Why did HLE Glascoat’s operating cash flow decline?

HLE Glascoat’s operating cash flow declined because working-capital movements reduced cash generated from operations to Rs 26.10 crore in the half year ended September 30, 2026, from Rs 81.54 crore in the corresponding prior-year period. Profit before tax also fell to Rs 25.07 crore from Rs 42.05 crore, reducing the starting point for cash generation before non-cash adjustments and working-capital changes.

The largest working-capital use was inventories, which consumed Rs 84.18 crore of cash in the six months to September 30, 2026. This was a reversal from the prior-year half, when inventories generated Rs 7.00 crore of cash. The inventory outflow was partly offset by a Rs 18.55 crore cash inflow from trade receivables, compared with a Rs 94.11 crore outflow from receivables in the previous year.

How much did inventory increase on HLE Glascoat’s balance sheet?

HLE Glascoat’s consolidated inventory balance rose by Rs 84.18 crore to Rs 439.94 crore at September 30, 2026, from Rs 355.76 crore at March 31, 2026. The balance-sheet change corresponds to the Rs 84.18 crore inventory cash outflow reported in the half-year cash-flow statement, showing that more cash was tied up in stock at the reporting date.

The inventory build-up occurred while current assets increased by Rs 50.63 crore to Rs 766.70 crore over the six-month period. Trade receivables moved in the opposite direction, declining by Rs 18.91 crore to Rs 250.98 crore, while other current assets increased by Rs 14.46 crore to Rs 38.09 crore. Inventory was the largest contributor to the increase in current assets.

HLE Glascoat reported half-year revenue from operations of Rs 647.41 crore, up from Rs 634.72 crore a year earlier. Glass Lined Products revenue increased to Rs 388.52 crore from Rs 286.93 crore, while Filtration, Drying and Other Equipment revenue declined to Rs 198.85 crore from Rs 252.14 crore and Heat Transfer Equipment revenue declined to Rs 59.34 crore from Rs 94.17 crore.

What happened to HLE Glascoat’s cash balance and borrowing?

HLE Glascoat’s cash and cash equivalents fell by Rs 19.25 crore during the half year to Rs 15.11 crore at September 30, 2026, from Rs 34.36 crore at March 31, 2026. The decline followed cash used in investing activities of Rs 21.45 crore and cash used in financing activities of Rs 11.90 crore, alongside the Rs 14.10 crore operating cash inflow.

The financing cash flow included Rs 55.00 crore of proceeds from long-term borrowings and Rs 22.36 crore of term-loan repayments. Working-capital facilities had a net repayment of Rs 17.09 crore, while interest payments totalled Rs 15.75 crore and dividends paid totalled Rs 7.64 crore. Fresh long-term borrowing therefore did not prevent the period-end reduction in cash and cash equivalents.

On the balance sheet, non-current borrowings increased by Rs 29.28 crore to Rs 129.93 crore at September 30, 2026. Current borrowings declined by Rs 15.01 crore to Rs 197.59 crore. Total liabilities increased to Rs 811.37 crore from Rs 763.55 crore at March 31, 2026, while total equity rose to Rs 627.09 crore from Rs 618.25 crore.

What investment spending affected HLE Glascoat’s cash flow?

HLE Glascoat used Rs 21.45 crore in investing activities in the half year ended September 30, 2026, compared with Rs 48.48 crore used a year earlier. Purchases of property, plant and equipment, including capital work-in-progress and capital advances, accounted for Rs 27.25 crore, exceeding the Rs 23.14 crore spent in the prior-year half.

Capital work-in-progress rose to Rs 10.51 crore at September 30, 2026, from Rs 3.74 crore at March 31, 2026. Property, plant and equipment decreased to Rs 391.53 crore from Rs 395.60 crore, while other intangible assets were Rs 155.02 crore compared with Rs 155.48 crore. HLE Glascoat reported no business acquisition or investment in a subsidiary in the 2026 half-year cash-flow statement, against Rs 28.66 crore for business acquisition in the comparable period.

The lower overall investing outflow despite higher purchases of property, plant and equipment reflected Rs 5.17 crore from fixed deposits maturing or being placed, compared with Rs 2.44 crore in the earlier period, and no acquisition payment in 2026. Interest income in investing cash flow was Rs 0.38 crore, against Rs 1.10 crore a year before, while proceeds from sale of property, plant and equipment were Rs 0.24 crore.

How did HLE Glascoat’s profit compare with cash generation?

HLE Glascoat reported consolidated profit after tax of Rs 18.07 crore for the half year ended September 30, 2026, compared with Rs 31.82 crore in the prior-year half. Net cash from operating activities of Rs 14.10 crore was below reported profit, principally because the Rs 84.18 crore inventory outflow offset non-cash additions including depreciation of Rs 19.79 crore and finance cost of Rs 16.75 crore.

Segment profit before interest and tax totalled Rs 43.97 crore, down from Rs 64.15 crore a year earlier. Glass Lined Products increased its segment result to Rs 17.80 crore from Rs 14.61 crore, but Filtration, Drying and Other Equipment declined to Rs 23.40 crore from Rs 35.33 crore, while Heat Transfer Equipment declined to Rs 2.78 crore from Rs 14.21 crore.

Conclusion

HLE Glascoat’s September 2026 half-year results show a divergence between revenue and cash conversion. Revenue increased by Rs 12.68 crore year on year to Rs 647.41 crore, but net cash from operating activities fell by Rs 60.48 crore to Rs 14.10 crore as inventory absorbed Rs 84.18 crore. Cash and cash equivalents consequently declined to Rs 15.11 crore despite Rs 55.00 crore of long-term borrowing proceeds.

The unresolved issue for the next reporting period is whether inventory, at Rs 439.94 crore on September 30, 2026, declines or continues to require cash. Other measures to watch include purchases of property, plant and equipment after Rs 27.25 crore in the first half and movement in non-current borrowings, which stood at Rs 129.93 crore at the reporting date.