Indokem first-half profit rises to Rs 1.50 crore as cash turns negative

Indokem Limited reported consolidated profit after tax of Rs 1.50 crore for the half year ended September 30, 2026, up from Rs 1.11 crore a year earlier, while operating activities used Rs 2.21 crore of cash. Income from operations increased to Rs 93.88 crore from Rs 81.87 crore, but higher inventories, receivables and other assets absorbed cash.

What were Indokem’s first-half consolidated results?

Indokem’s consolidated profit after tax increased by Rs 39 lakh to Rs 1.50 crore in the half year ended September 30, 2026, from Rs 1.11 crore in the corresponding 2025 period. Profit before tax rose to Rs 1.51 crore from Rs 1.12 crore, while total comprehensive income increased to Rs 1.49 crore from Rs 1.01 crore.

Income from operations rose by Rs 12.01 crore to Rs 93.88 crore, and total income increased by Rs 11.98 crore to Rs 94.56 crore. Other income declined to Rs 68 lakh from Rs 71 lakh, meaning the increase in total income came from operations rather than other income.

Indokem reported basic and diluted earnings per share of Rs 0.54 for the six-month period, against Rs 0.40 a year earlier. The filing states that earnings per share were not annualised, while paid-up equity share capital stood at Rs 27.89 crore at September 30, 2026.

How did Indokem’s expenses and quarterly profit change?

Indokem’s total expenses rose to Rs 93.05 crore in the half year ended September 30, 2026 from Rs 81.46 crore a year earlier, an increase of Rs 11.59 crore. The increase was lower than the Rs 11.98 crore rise in total income, resulting in a Rs 39 lakh increase in profit before tax.

Cost of materials consumed, the largest identified expense, increased to Rs 60.74 crore from Rs 53.23 crore. Employee-benefit expense rose to Rs 11.34 crore from Rs 10.30 crore, other expenditure increased to Rs 14.94 crore from Rs 13.78 crore, and finance cost rose to Rs 1.86 crore from Rs 1.45 crore.

In the quarter ended September 30, 2026, Indokem reported profit after tax of Rs 43 lakh, compared with Rs 1.07 crore in the June 2026 quarter and Rs 41 lakh in the September 2025 quarter. September-quarter income from operations was Rs 47.25 crore, above Rs 46.63 crore in June 2026 and Rs 40.30 crore a year earlier.

Indokem identifies textile dyes and chemicals and electrical capacitors as its two operating segments. It did not separately disclose electrical-capacitor results because it said the segment did not qualify for separate reporting under Indian Accounting Standard 108 on operating segments, leaving no segment-level revenue or profit comparison in the filing.

Why did Indokem’s operating cash flow turn negative?

Indokem used Rs 2.21 crore in consolidated operating activities during the half year ended September 30, 2026, compared with Rs 1.78 crore generated in the prior-year half. Cash generated from operations was negative Rs 2.17 crore, against positive Rs 1.60 crore a year earlier, and net income taxes paid were Rs 4 lakh after a Rs 18 lakh net refund in the prior period.

Operating profit before working-capital changes was unchanged at Rs 4.19 crore in both half-year periods. The cash-flow reversal followed an Rs 2.80 crore increase in inventories, an Rs 3.08 crore increase in trade receivables and an Rs 2.53 crore increase in other assets during the 2026 half year.

Those working-capital outflows were partly offset by a Rs 1.09 crore increase in trade payables, a Rs 53 lakh increase in provisions and a Rs 31 lakh increase in other financial liabilities. Indokem prepared the cash-flow statement under the indirect method prescribed by Indian Accounting Standard 7, which adjusts profit before tax for non-cash items and working-capital movements.

How did Indokem’s financing and balance sheet change?

Indokem generated Rs 2.89 crore of financing cash flow in the first half of 2026-27, compared with a Rs 48 lakh financing outflow a year earlier. It received Rs 15.12 crore in loans from banks and financial institutions and repaid Rs 12.41 crore, a net Rs 2.71 crore inflow before other financing movements.

The group received Rs 1 crore in unsecured loans from directors and repaid Rs 51 lakh, while finance costs paid were Rs 1.86 crore. It also recorded a Rs 1.57 crore loan taken from a company and repaid Rs 2 lakh of loans to a company; net investing cash outflow was Rs 6 lakh.

Cash and cash equivalents increased by Rs 62 lakh to Rs 3.49 crore at September 30, 2026 from Rs 2.87 crore at March 31, 2026. Total assets rose to Rs 152.50 crore from Rs 145.01 crore, with inventories increasing to Rs 36.07 crore from Rs 33.29 crore and trade receivables to Rs 45.23 crore from Rs 42.69 crore.

Total liabilities increased to Rs 86.25 crore from Rs 80.50 crore, while total equity rose to Rs 66.25 crore from Rs 64.51 crore. Non-current borrowings increased to Rs 27.43 crore from Rs 24.72 crore and current borrowings rose to Rs 4.11 crore from Rs 2.10 crore.

Conclusion

Indokem’s first-half filing shows that higher income from operations and a Rs 39 lakh increase in consolidated profit did not translate into operating cash generation. Inventory, receivable and other-asset increases outweighed the Rs 4.19 crore operating profit before working-capital changes, producing a Rs 2.21 crore operating cash outflow.

What to watch next is whether the September 30, 2026 balances of Rs 36.07 crore in inventories and Rs 45.23 crore in trade receivables change alongside operating cash flow. The filing also shows total borrowings of Rs 31.54 crore at the period end, following Rs 2.89 crore of net financing inflows during the first half.