Kemistar depreciation change raised pre-tax profit by Rs 89 lakh

Kemistar Corporation Limited said a depreciation-method change at subsidiary K.P. International Private Limited increased profit before tax by Rs 89 lakh for the quarter ended September 30, 2026, before consequential tax effects. The auditor put depreciation under the straight-line method at Rs 31.97 lakh, versus Rs 1.2079 crore under the former written-down-value method.

Why did Kemistar's pre-tax profit rise by Rs 89 lakh?

Kemistar's pre-tax profit rose by Rs 89 lakh because K.P. International Private Limited changed how it charged depreciation on property, plant and equipment during the quarter ended September 30, 2026. The limited review report, dated November 6, 2026, says the subsidiary replaced the written-down-value, or WDV, method with the straight-line method, or SLM.

The auditor stated that the revised SLM depreciation charge was Rs 31.97 lakh for the period, compared with Rs 1.2079 crore that would have been charged under the erstwhile WDV method. It specifically attributed the Rs 89 lakh increase in profit before tax to that lower charge, before considering consequential tax impact.

The disclosure identifies an accounting-method effect rather than a revenue item. Kemistar's consolidated statement reported revenue from operations of Rs 6.7086 crore in the September 2026 quarter, while the auditor separately quantified the depreciation-method effect at the subsidiary level.

What were Kemistar's September 2026 consolidated results?

Kemistar reported consolidated profit before tax of Rs 13.74 lakh for the quarter ended September 30, 2026, compared with Rs 38.39 lakh in the quarter ended June 30, 2026 and Rs 0.93 lakh in the quarter ended September 30, 2025. Profit for the period was Rs 15.19 lakh, compared with Rs 25.14 lakh in the immediately preceding quarter and Rs 0.93 lakh a year earlier.

Total revenue was Rs 6.7386 crore in the September 2026 quarter, down from Rs 10.0546 crore in June 2026 and Rs 8.5949 crore a year earlier. The September total included Rs 6.7086 crore of revenue from operations and Rs 3 lakh of other income.

Consolidated depreciation and amortisation expense was Rs 6.47 lakh, versus Rs 41.65 lakh in June 2026 and Rs 10.31 lakh in September 2025. Kemistar's filing does not provide a reconciliation between that consolidated line item and the auditor's Rs 31.97 lakh subsidiary depreciation figure under SLM.

The standalone result differed from the consolidated outcome. Kemistar reported a standalone pre-tax loss of Rs 0.83 lakh and depreciation and amortisation expense of Rs 3.21 lakh for the September 2026 quarter, while the review report identifies K.P. International Private Limited as the subsidiary that changed its method.

How did Kemistar perform in the six months ended September 2026?

Kemistar reported consolidated total revenue of Rs 16.7932 crore for the six months ended September 30, 2026, compared with Rs 11.4587 crore for the six months ended September 30, 2025. Revenue from operations rose to Rs 16.7277 crore from Rs 11.4319 crore, while other income increased to Rs 6.55 lakh from Rs 2.68 lakh.

Consolidated profit before tax was Rs 52.13 lakh for the six months, compared with Rs 12.09 lakh a year earlier. Profit for the period was Rs 40.33 lakh, against Rs 12.09 lakh in the prior-year period; the filing does not separately quantify the cumulative six-month effect of the September-quarter depreciation change.

Depreciation and amortisation for the six months was Rs 35.18 lakh, up from Rs 16.75 lakh in the comparable period, while finance costs declined to Rs 18.62 lakh from Rs 19.05 lakh. The filing does not allocate the revenue, depreciation or profit movements by customer, product, geography or subsidiary.

Kemistar recorded net cash outflow from operating activities of Rs 24.76 lakh for the six months ended September 30, 2026, compared with an inflow of Rs 40.63 lakh a year earlier. Trade receivables increased by Rs 2.4663 crore, while trade and other payables increased by Rs 1.148 crore during the period.

What do Kemistar's balance sheet and review report show?

Kemistar had consolidated total assets of Rs 39.4022 crore at September 30, 2026, compared with Rs 37.792 crore at March 31, 2026. Total equity rose to Rs 19.3162 crore from Rs 18.9132 crore, while cash and cash equivalents fell to Rs 19.33 lakh from Rs 53.83 lakh at the beginning of the six-month period.

Property, plant and equipment stood at Rs 14.0404 crore at September 30, 2026, compared with Rs 4.7662 crore at March 31, 2026. Capital work in progress was nil at September 30, compared with Rs 9.5964 crore six months earlier, according to the consolidated balance sheet.

Kemistar's board approved the unaudited consolidated and standalone results on November 6, 2026, following review by its audit committee. The board meeting began at 6:35 PM and ended at 7:25 PM, and the company reported consolidated basic and diluted earnings per share of Rs 0.14 for the September quarter.

N.S. Nanavati & Co. performed a limited review under Standard on Review Engagements 2410 rather than an audit. The reviewer said the work provides moderate assurance and reported that nothing had come to its attention indicating that the consolidated statement lacked required disclosures or contained a material misstatement.

What remains undisclosed about Kemistar's depreciation change?

Kemistar has not disclosed why K.P. International Private Limited selected SLM, the useful lives applied to its assets, or the asset categories affected by the September 2026 change. The auditor's disclosure gives only the Rs 31.97 lakh charge under SLM, the Rs 1.2079 crore charge under WDV, and the resulting Rs 89 lakh pre-tax effect.

Kemistar also has not quantified the consequential tax impact of the Rs 89 lakh pre-tax increase. The consolidated September-quarter statement reported tax expense of Rs 1.45 lakh, including deferred tax of Rs 1.45 lakh, but it does not connect that amount to the subsidiary's method change.

The filing was prepared under Indian Accounting Standards, or Ind AS, and the consolidated results cover the quarter and six months ended September 30, 2026. It contains no target, implementation timetable or forward earnings outlook related to the subsidiary's use of SLM.

Conclusion

Kemistar's September 2026 filing shows that a subsidiary's move from WDV to SLM reduced the period's depreciation charge from Rs 1.2079 crore to Rs 31.97 lakh and raised pre-tax profit by Rs 89 lakh before tax. At the consolidated level, Kemistar reported Rs 13.74 lakh of quarterly profit before tax on total revenue of Rs 6.7386 crore.

The next point to watch is whether a future Kemistar filing quantifies the consequential tax effect or explains the useful-life assumptions and rationale behind the September 30, 2026 depreciation-method change. Those matters remain unresolved in the November 6, 2026 limited review report.