KCP reports Rs 118.44 crore net H1 operating cash outflow

The KCP Limited reported a consolidated net operating cash outflow of Rs 118.44 crore for HY1/2026-27, against an outflow of Rs 94.79 crore a year earlier, although profit before tax was Rs 118.19 crore. KCP’s cash flow was affected primarily by a Rs 255.57 crore increase in other bank deposits and a Rs 50.55 crore increase in current trade receivables.

Why did KCP report an operating cash outflow?

KCP reported a Rs 118.44 crore net cash outflow from operating activities in HY1/2026-27 because working-capital movements exceeded operating profit before those movements. Cash generated from or used in operations was negative Rs 121.09 crore, compared with negative Rs 93.31 crore in HY1/2025-26, while the direct-tax line was Rs 2.65 crore in the latest half.

Operating profit before working-capital changes was Rs 123.87 crore in HY1/2026-27, down from Rs 218.91 crore in HY1/2025-26. The reconciliation included Rs 51.21 crore of depreciation and amortisation, Rs 22.11 crore of interest expense and Rs 56.36 crore of interest income, compared with Rs 44.67 crore, Rs 19.04 crore and Rs 24.15 crore respectively a year earlier.

The largest working-capital cash use was the Rs 255.57 crore increase in other bank deposits, versus a Rs 102.71 crore increase in the preceding-year half. Current trade receivables used Rs 50.55 crore and current other financial liabilities fell by Rs 83.20 crore, partly offset by a Rs 101.49 crore reduction in inventories and a Rs 41.67 crore increase in other current liabilities.

How did bank deposits change KCP’s cash position?

KCP’s other bank balances increased to Rs 1,401.83 crore at 30 September 2026 from Rs 1,146.08 crore at 31 March 2026. This Rs 255.75 crore balance-sheet increase was close to the Rs 255.57 crore cash-flow movement recorded for other bank deposits during HY1/2026-27.

Cash and bank balances in the consolidated cash-flow statement fell to Rs 6.54 crore at 30 September 2026 from Rs 20.84 crore at the beginning of the year, a decline of Rs 14.30 crore. The closing amount comprised Rs 0.16 crore of cash on hand and Rs 6.38 crore in current accounts, while the separate other-bank-balance category was Rs 1,401.83 crore.

KCP’s consolidated balance sheet also recorded inventories of Rs 513.50 crore at 30 September 2026, down from Rs 614.99 crore at 31 March 2026. Trade receivables increased to Rs 206.76 crore from Rs 156.11 crore over the same dates, matching the cash-flow statement’s Rs 101.49 crore inventory release and Rs 50.55 crore receivables use.

How did KCP fund cash needs during HY1/2026-27?

KCP generated a Rs 94.89 crore financing cash inflow in HY1/2026-27, compared with an inflow of Rs 261.02 crore in HY1/2025-26. Proceeds from long-term and short-term borrowings were Rs 140.75 crore, while repayments of those borrowings were Rs 11.39 crore.

Interest paid of Rs 21.08 crore, dividends paid of Rs 13.08 crore, lease-principal repayments of Rs 0.10 crore and lease-interest payments of Rs 0.21 crore reduced the financing inflow. Borrowing proceeds were Rs 174.29 crore below the Rs 315.04 crore reported in HY1/2025-26, while repayments were lower than the earlier Rs 32.49 crore.

Consolidated current borrowings rose to Rs 514.70 crore at 30 September 2026 from Rs 373.15 crore at 31 March 2026. Non-current borrowings declined to Rs 276.59 crore from Rs 288.78 crore, meaning the Rs 153.76 crore increase in total reported borrowings was concentrated in current borrowings.

Did investing activities and operating profit support KCP’s cash flow?

KCP reported a Rs 9.25 crore investing cash inflow in HY1/2026-27, reversing a Rs 141.68 crore outflow in HY1/2025-26. Interest received was Rs 55.31 crore, up from Rs 22.94 crore, while purchases of fixed assets, intangible assets and capital work-in-progress were Rs 46.92 crore, down from Rs 154.20 crore.

The investing result also included Rs 1.84 crore of proceeds from fixed-asset sales, Rs 1.56 crore from sale of non-current investments and Rs 1.12 crore related to the value of investments in the joint venture. Purchases of current investments used Rs 3.67 crore, compared with Rs 11.24 crore in HY1/2025-26.

KCP’s consolidated revenue from operations increased to Rs 1,652.39 crore in HY1/2026-27 from Rs 1,278.04 crore a year earlier, while profit before tax declined to Rs 118.19 crore from Rs 158.93 crore. Profit after tax and share of joint-venture results was Rs 120.18 crore, compared with Rs 137.43 crore, showing that the cash outflow occurred alongside reported profit.

Which segments shaped KCP’s first-half results?

KCP’s sugar segment was the largest revenue contributor in HY1/2026-27, reporting Rs 825.63 crore of revenue against Rs 508.98 crore a year earlier. Its earnings before interest and tax, or EBIT, were Rs 86.83 crore, down from Rs 111.24 crore despite the revenue increase.

Cement revenue rose to Rs 751.25 crore from Rs 700.44 crore, but cement EBIT declined to Rs 0.55 crore from Rs 48.96 crore. Heavy engineering revenue increased to Rs 54.72 crore from Rs 48.93 crore, while its EBIT loss widened to Rs 7.82 crore from Rs 3.21 crore.

KCP said its subsidiary KCP Vietnam Industries Limited manufactures sugar in a seasonal business whose normal season runs from January to May in Vietnam. The company said this seasonality means quarter-to-quarter financial results may not be comparable; the consolidated results also include Fives Cail KCP Limited, a joint venture, and were approved on 6 November 2026.

Conclusion

KCP’s HY1/2026-27 cash flow shows an operating outflow of Rs 118.44 crore despite Rs 118.19 crore of profit before tax. The Rs 255.57 crore increase in other bank deposits was the largest disclosed driver, while higher receivables and lower current other financial liabilities added to cash use; financing inflows and investing inflows only partly offset the operating outflow.

The next quarterly disclosures will show whether other bank balances, at Rs 1,401.83 crore on 30 September 2026, and current borrowings, at Rs 514.70 crore, change further. KCP’s disclosure that the normal Vietnam sugar season runs from January to May makes results through that period relevant to the group’s segment performance and cash-flow pattern.