Honda India Power Products posts loss after Rs 36.15 crore charge

Honda India Power Products Limited posted a Rs 4.06 crore loss for the quarter ended September 30, 2026, after a Rs 36.15 crore exceptional charge for its Career and Entrepreneurial Renewal Programme exceeded Rs 30.91 crore of profit before exceptional items and tax. Revenue from operations nevertheless rose to Rs 256.21 crore.

What caused Honda India Power Products' September-quarter loss?

Honda India Power Products made a Rs 4.06 crore net loss in the September 2026 quarter because its Rs 36.15 crore exceptional employee-benefit charge exceeded its Rs 30.91 crore profit before exceptional items and tax. The charge reduced profit before tax to a Rs 5.24 crore loss, compared with profits before tax of Rs 15.10 crore in the June 2026 quarter and Rs 15.07 crore a year earlier.

The exceptional item related to the Career and Entrepreneurial Renewal Programme, or CERP, a voluntary policy for permanent Operators, also called Line Associates. The company said the programme was intended to facilitate voluntary career transitions, entrepreneurial pursuits and personal priorities, and that management approved all applications during the quarter ended September 30, 2026.

A current-tax credit of Rs 1.23 crore and deferred-tax expense of Rs 0.05 crore resulted in a net tax credit of Rs 1.18 crore for the quarter. This reduced the pre-tax loss of Rs 5.24 crore to the reported Rs 4.06 crore loss, while total comprehensive loss was Rs 4.53 crore after a Rs 0.47 crore other comprehensive loss.

How did Honda India Power Products' revenue and underlying profit change?

Honda India Power Products' revenue from operations rose to Rs 256.21 crore in the quarter ended September 30, 2026, from Rs 189.25 crore in the June 2026 quarter and Rs 175.61 crore in the September 2025 quarter. The company identifies Power Products as its single operating segment, so its filing does not provide a split by product line or geography.

Revenue from contracts with customers contributed Rs 252.80 crore in the latest quarter, while other operating revenue was Rs 3.41 crore. In the June 2026 quarter, the corresponding figures were Rs 186.61 crore and Rs 2.64 crore, meaning both reported revenue components increased as quarterly operational revenue rose by Rs 66.96 crore.

Employee-benefit expense within regular expenses was Rs 41.04 crore in the September quarter, versus Rs 35.06 crore in June 2026 and Rs 35.49 crore a year earlier, before the separately disclosed CERP charge. Other expenses rose to Rs 42.07 crore from Rs 33.33 crore sequentially, while depreciation and amortisation increased to Rs 7.40 crore from Rs 6.69 crore.

Cost of materials consumed reached Rs 159.13 crore in the September quarter, up from Rs 127.55 crore in June 2026 and Rs 105.38 crore in September 2025. Changes in inventories reduced expenses by Rs 30.45 crore, compared with reductions of Rs 47.07 crore in the preceding quarter and Rs 23.20 crore in the year-ago quarter.

How did Honda India Power Products' first-half results compare with last year?

Honda India Power Products remained profitable for the half year ended September 30, 2026, but net profit declined to Rs 7.04 crore from Rs 20.65 crore in the corresponding half of 2025. The full Rs 36.15 crore CERP exceptional charge was recognised in the September quarter, while first-half revenue from operations increased to Rs 445.46 crore from Rs 330.52 crore.

Profit before exceptional items and tax rose to Rs 46.01 crore in the first half of 2026 from Rs 27.86 crore a year earlier. After the exceptional item, profit before tax was Rs 9.86 crore, down from Rs 27.86 crore, while tax expense fell to Rs 2.82 crore from Rs 7.21 crore.

The company reported total comprehensive income of Rs 6.44 crore for the half year ended September 30, 2026, compared with Rs 20.34 crore in the prior-year half. Basic and diluted earnings per share were Rs 6.94 for the latest half year, against Rs 20.36 a year earlier; the company stated that these per-share figures were not annualised.

The half-year cash-flow statement reported net cash generated from operating activities of Rs 17.07 crore, compared with net cash used of Rs 31.80 crore in the corresponding 2025 period. It showed Rs 53.43 crore of cash generated in operations before income taxes and the Rs 36.15 crore exceptional item, while the September 2026 closing cash and cash equivalents balance was Rs 71.93 crore.

What does Honda India Power Products say about CERP and its financial position?

Honda India Power Products said amounts payable to eligible CERP employees are expected to be settled within three months, and it withdrew the programme after discontinuing further applications. The filing does not disclose a further CERP charge beyond the Rs 36.15 crore recognised in the quarter ended September 30, 2026.

Total assets were Rs 1,020.70 crore at September 30, 2026, compared with Rs 1,031.82 crore at March 31, 2026. Total equity declined to Rs 786.49 crore from Rs 803.37 crore, while total current liabilities increased to Rs 233.54 crore from Rs 227.53 crore over the same period.

Cash and cash equivalents at September 30, 2026 were Rs 71.93 crore, up from Rs 66.33 crore at the start of the financial year. Net cash generated in investing activities was Rs 12.06 crore for the first half, while financing activities used Rs 23.66 crore, including Rs 23.28 crore of dividends paid.

The Audit Committee reviewed, and the Board approved, the unaudited September 2026 results on November 5, 2026. The statutory auditor issued an unmodified limited-review report and said nothing had come to its attention to suggest that the results contained a material misstatement or failed to make required disclosures.

Conclusion

Honda India Power Products' September-quarter loss resulted from the exceptional Rs 36.15 crore CERP employee-benefit charge rather than a fall in reported revenue or pre-exceptional profit. Revenue rose by Rs 80.60 crore year on year to Rs 256.21 crore, while profit before exceptional items and tax increased to Rs 30.91 crore from Rs 15.07 crore.

The next disclosed matter to watch is settlement of the eligible CERP benefits within three months, after the company withdrew the policy and stopped taking further applications. Future results will also show whether employee-benefit expense, reported at Rs 41.04 crore before the exceptional item in the September quarter, changes after the programme's discontinuation.