Kalyani Investment Q2 profit rises 78% as associate loss narrows

Kalyani Investment Company Limited reported consolidated profit after tax of Rs 33.724 crore for the quarter ended September 30, 2026, up 78% from Rs 18.927 crore a year earlier, as its share of associate loss narrowed to Rs 1.913 crore from Rs 10.944 crore. Total income rose to Rs 47.910 crore from Rs 43.926 crore.

Why did Kalyani Investment’s Q2 profit increase?

Kalyani Investment’s September-quarter profit increased because income rose, expenses declined and its equity-accounted associate loss reduced substantially. Profit before the associate share, exceptional items and tax was Rs 45.333 crore, compared with Rs 38.007 crore in the quarter ended September 30, 2025, while the associate loss fell by Rs 9.031 crore year on year.

Profit before tax rose to Rs 43.420 crore from Rs 27.063 crore despite total tax expense increasing to Rs 9.696 crore from Rs 8.136 crore. The September 2026 tax charge included current tax of Rs 10.700 crore and a deferred-tax credit of Rs 1.004 crore. Earnings per share, not annualised, rose to Rs 77.25 from Rs 43.36 on shares with a face value of Rs 10 each.

What drove Kalyani Investment’s income and expense movements?

Kalyani Investment’s total income increased by Rs 3.984 crore to Rs 47.910 crore in the quarter ended September 30, 2026. Dividend income, identified by the company as its main source of income, rose to Rs 42.501 crore from Rs 37.987 crore. Interest on fixed deposits increased to Rs 5.640 crore from Rs 4.666 crore.

The net result on fair-value changes turned into a loss of Rs 23.1 lakh in the September 2026 quarter, against a gain of Rs 1.273 crore a year earlier. This movement partly offset the higher dividend and interest income. Kalyani Investment operates in a single investments segment and therefore does not provide segment reporting under Indian Accounting Standard 108, or Ind AS 108.

Total expenses declined to Rs 2.577 crore from Rs 5.919 crore. Other expenses fell to Rs 2.431 crore from Rs 5.789 crore, while employee-benefit expense increased to Rs 14.6 lakh from Rs 13 lakh. The reduction in total expenses and the rise in income together lifted profit before the associate share by Rs 7.326 crore.

How did Hikal affect Kalyani Investment’s quarterly results?

Kalyani Investment’s 31.36% holding in Hikal Limited is accounted for as an associate using the equity method, and its share of Hikal’s post-tax result was a loss of Rs 1.913 crore in the September 2026 quarter. That compared with a loss of Rs 10.944 crore in the September 2025 quarter and Rs 2.321 crore in the June 2026 quarter.

For the half year ended September 30, 2026, Kalyani Investment recorded an associate loss of Rs 4.234 crore, down from Rs 17.969 crore in the prior-year half year. Consolidated half-year profit after tax rose to Rs 34.408 crore from Rs 15.746 crore. Its share of the associate’s other comprehensive income was Rs 14.1 lakh in the September quarter, against a Rs 9.4 lakh loss a year earlier.

The filing also describes earlier exceptional items at Hikal that can affect Kalyani Investment’s equity-accounted outcomes. Hikal recorded an impairment charge of Rs 14.771 crore in the quarter and year ended March 31, 2026 after identifying equipment no longer usable in a repurposed manufacturing plant. In the June 2026 quarter, Hikal restructured salary components, reducing a labour-code and gratuity liability by Rs 8.900 crore as an exceptional item.

What do Kalyani Investment’s balance sheet and cash flows show?

Kalyani Investment’s total assets were Rs 14,141.629 crore at September 30, 2026, compared with Rs 12,434.294 crore at March 31, 2026. Investments increased to Rs 13,540.226 crore from Rs 11,855.461 crore, while bank balances other than cash equivalents rose to Rs 337.818 crore from Rs 309.974 crore.

Total equity increased to Rs 12,868.935 crore at September 30 from Rs 11,391.331 crore six months earlier. Reserves and surplus stood at Rs 12,864.570 crore, compared with Rs 11,386.966 crore at March 31. Net deferred-tax liabilities rose to Rs 1,267.121 crore from Rs 1,039.874 crore over the same period.

Net cash from operating activities was Rs 11.298 crore for the half year ended September 30, 2026, compared with net cash used of Rs 14.086 crore in the corresponding prior-year period. Investing activities used Rs 6.709 crore, against an inflow of Rs 16.724 crore a year earlier, while financing activities used Rs 4.365 crore for dividend payments. Cash and cash equivalents ended the period at Rs 36.4 lakh, up from Rs 14 lakh at March 31, 2026.

What unresolved Hikal matter should readers monitor?

Kalyani Investment disclosed no material development in the September 2026 quarter regarding alleged improper disposal of by-products and alleged environmental-law non-compliance by Hikal. The matter remains before the Supreme Court of India, which has stayed an order passed by the National Green Tribunal’s Principal Bench in New Delhi.

The stayed National Green Tribunal order accepted joint-committee reports that included recovery of compensation of Rs 17.45 crore from Hikal. Based on external legal counsel’s advice, Hikal believes it has a good case on merits and is taking legal measures to defend itself; the filing states that no further provision is required in the financial results.

The consolidated auditor drew attention to this litigation and said the outcome is presently uncertain. The auditor also stated that its review conclusion was not modified in respect of the matter. Kalyani Investment’s unaudited consolidated results for the quarter and half year ended September 30, 2026 were approved by its board on November 4, 2026.

Conclusion

Kalyani Investment’s September-quarter earnings improvement reflected a Rs 3.984 crore increase in total income, a Rs 3.342 crore decline in expenses and a Rs 9.031 crore reduction in the share of associate loss. These movements took consolidated profit after tax to Rs 33.724 crore, compared with Rs 18.927 crore a year earlier.

The next reported Hikal result remains relevant because Kalyani Investment holds 31.36% of the associate and records its share of Hikal’s post-tax outcome through the equity method. The Supreme Court proceeding over the Rs 17.45 crore compensation matter is also unresolved, with the auditor identifying its outcome as uncertain.