K.C.P. Sugar repays Rs 52.74 crore as cash flow turns positive

K.C.P. Sugar and Industries Corporation Limited generated Rs 86.02 crore of consolidated operating cash flow in the half year ended September 30, 2026, and reported Rs 52.74 crore of net repayment of long-term and short-term borrowings. A Rs 86.06 crore inventory release and a Rs 33.22 crore reduction in current investments were the largest stated cash-flow drivers.

How much did K.C.P. Sugar repay in borrowings?

K.C.P. Sugar reported Rs 52.74 crore of net repayment of long-term and short-term borrowings in consolidated financing cash flow for the half year ended September 30, 2026. Total consolidated borrowings fell to Rs 74.97 crore at September 30 from Rs 127.71 crore at March 31, 2026, a reduction equal to the reported net repayment.

The reduction was concentrated in current borrowings, which declined by Rs 69.66 crore to Rs 22.49 crore from Rs 92.16 crore at March 31. Non-current borrowings increased by Rs 16.92 crore to Rs 52.47 crore from Rs 35.55 crore, so the period included both an overall decrease in borrowing and a larger proportion classified as non-current.

K.C.P. Sugar used Rs 58.73 crore in financing activities during the six-month period. That outflow comprised the Rs 52.74 crore borrowing repayment, Rs 4.85 crore of interest paid and Rs 1.13 crore of dividends paid; in the year ended March 31, 2026, financing activities had generated Rs 19.51 crore, including Rs 28.39 crore of net borrowing proceeds.

What generated K.C.P. Sugar’s operating cash flow?

K.C.P. Sugar generated Rs 86.02 crore of consolidated net cash from operations in the half year ended September 30, 2026, compared with Rs 45.04 crore used in operations in the year ended March 31, 2026. The change reflected working-capital movements, particularly lower inventory, receivables and current investments, after adjustments to profit before tax.

Inventory provided the largest cash contribution of Rs 86.06 crore in the consolidated cash-flow statement. Consolidated inventory declined to Rs 69.72 crore at September 30 from Rs 155.78 crore at March 31, while trade receivables declined to Rs 40.75 crore from Rs 57.40 crore, producing a Rs 16.65 crore cash release.

Current investments released Rs 33.22 crore of cash, declining to Rs 54.40 crore at September 30 from Rs 87.62 crore at March 31. These releases were partly offset by a Rs 47.11 crore increase in other current assets, while a Rs 5.30 crore decrease in trade payables also reduced operating cash during the six months.

Did profit before tax translate directly into cash flow?

K.C.P. Sugar’s Rs 100.48 crore consolidated profit before tax for the half year did not translate directly into operating cash before working-capital changes. The cash-flow reconciliation reduced that profit by a Rs 89.69 crore fair-value adjustment, alongside Rs 2.15 crore of interest income and Rs 2.60 crore of dividend income.

Operating cash flow before working-capital changes was Rs 12.91 crore for the half year, below Rs 14.15 crore reported for the year ended March 31, 2026. Depreciation and amortisation of Rs 1.82 crore and interest expense of Rs 4.85 crore were added back, but the final Rs 86.02 crore operating inflow depended mainly on the stated changes in inventory, receivables and investments.

The half-year profit before tax was higher than Rs 25.45 crore in the corresponding half year ended September 30, 2025. Consolidated revenue from operations increased to Rs 156.38 crore from Rs 126.57 crore, with sugar revenue rising to Rs 85.33 crore from Rs 74.23 crore and engineering revenue increasing to Rs 28.59 crore from Rs 21.43 crore.

How did K.C.P. Sugar’s investments and bank balances change?

K.C.P. Sugar’s consolidated non-current investments increased by Rs 90.23 crore to Rs 295.37 crore at September 30, 2026, from Rs 205.14 crore at March 31. This increase exceeded the Rs 33.22 crore reduction in current investments, meaning the group’s combined investment balances increased over the six months.

Investing activities used Rs 35.30 crore in the half year, compared with a Rs 6.09 crore inflow in the year ended March 31, 2026. Changes in margin-money deposits used Rs 35.16 crore, fixed-asset purchases used Rs 4.85 crore, and dividend income of Rs 2.60 crore plus interest received of Rs 2.15 crore partly offset those cash uses.

Cash and cash equivalents increased by Rs 4.90 crore to Rs 19.75 crore at September 30 from Rs 14.85 crore at March 31. Bank balances other than cash and cash equivalents increased by Rs 35.16 crore to Rs 59.66 crore, matching the movement in margin-money deposits presented within investing cash flow.

What does the cash flow show about K.C.P. Sugar’s balance sheet?

K.C.P. Sugar’s first-half cash flow supported both a Rs 52.74 crore reduction in total borrowings and a Rs 4.90 crore increase in cash and cash equivalents. The reported Rs 86.02 crore operating inflow was substantially larger than the Rs 12.91 crore cash flow before working-capital changes, identifying balance-sheet movements as the main source of the period’s cash conversion.

Asset composition changed alongside the repayment. Non-current investments rose to Rs 295.37 crore, other current assets rose to Rs 60.11 crore from Rs 9.26 crore, and bank balances other than cash equivalents reached Rs 59.66 crore, while total borrowings fell to Rs 74.97 crore from Rs 127.71 crore.

K.C.P. Sugar also reported consolidated profit after tax of Rs 85.57 crore for the half year, compared with Rs 19.57 crore in the corresponding half year a year earlier. The company states that the sugar industry is seasonal and predominantly cyclical, and says interim results cannot be construed as an indicator of overall annual operations, profitability or quarter-to-quarter comparability within a financial year.

Conclusion

K.C.P. Sugar reported a shift in cash generation in the half year ended September 30, 2026: operations generated Rs 86.02 crore, compared with Rs 45.04 crore used in the year ended March 31, 2026, while total borrowings fell Rs 52.74 crore to Rs 74.97 crore. Inventory alone accounted for Rs 86.06 crore of the operating cash release, making working-capital movement central to the repayment.

The disclosed item to watch is the seasonal recognition of sugar and co-generation costs during the remaining period of the current sugar season. The auditor said K.C.P. Sugar had deferred Rs 17.48 crore of other expenditure and Rs 1.17 crore of depreciation at September 30, 2026, and stated that these expenses would be absorbed at the end of the last quarter.