Kemp first-half profit driven by financial-asset gains

Kemp & Company Limited reported a Rs 1.3587 crore profit for the half year ended 30 September 2026, compared with a Rs 52.65 lakh loss a year earlier, as a Rs 2.5648 crore gain on financial assets measured at fair value through profit or loss outweighed a decline in combined trading and real-estate segment profit.

What drove Kemp’s return to first-half profit?

Kemp returned to profit mainly through unallocated income rather than higher segment earnings. Profit before tax was Rs 1.6509 crore for the half year ended 30 September 2026, against a Rs 71.30 lakh loss before tax in the corresponding 2025 period. Combined segment profit before tax and finance cost, however, fell to Rs 10.10 lakh from Rs 19.65 lakh.

The reconciliation between segment performance and profit before tax shows Rs 1.5499 crore of other unallocable income net of unallocable expenditure, compared with unallocable expenditure exceeding income by Rs 90.95 lakh a year earlier. This movement was larger than the Rs 9.55 lakh fall in the combined segment result. Total tax expense was Rs 29.22 lakh, including Rs 3.54 lakh of current tax and Rs 25.68 lakh of deferred tax.

The reported outcome also differed from the previous full year. Kemp recorded a Rs 2.2142 crore loss for the year ended 31 March 2026, whereas the six months ended 30 September 2026 delivered a Rs 1.3587 crore profit. The filing does not provide a management earnings target or forecast, so it does not state whether this first-half result is expected to continue.

How important were financial-asset gains to Kemp’s earnings?

Financial-asset gains were larger than Kemp’s reported first-half profit. The cash-flow statement records a Rs 2.5648 crore net gain on financial assets measured at fair value through profit or loss, or FVTPL, for the half year ended 30 September 2026. The comparable gain was Rs 0.01 lakh in the half year ended 30 September 2025.

The FVTPL gain is removed in the indirect cash-flow reconciliation because it is not operating cash generated during the period. After adjusting profit before tax for that gain, Rs 73.88 lakh of depreciation and amortisation, and the other listed items, Kemp reported an operating loss before working-capital changes of Rs 37.30 lakh. The comparable operating loss before working-capital changes was Rs 69.77 lakh.

Other listed investment-related items included a Rs 15.46 lakh realised gain on sale of mutual-fund investments, Rs 3.21 lakh of dividend income from equity instruments designated at fair value through other comprehensive income, and a Rs 1.10 lakh profit on sale of property, plant and equipment. These figures show that the first-half profit included valuation and investment-related gains alongside the operating-segment results.

Did Kemp’s trading and real-estate segments improve?

Kemp’s operating revenue increased, but its combined segment profit declined. Revenue from operations rose to Rs 2.2841 crore in the half year ended 30 September 2026 from Rs 1.4212 crore in the corresponding prior-year period. Real estate produced Rs 1.9769 crore of that revenue, up from Rs 1.0402 crore, while trading revenue fell to Rs 30.72 lakh from Rs 38.10 lakh.

Real-estate segment profit before tax and finance cost declined to Rs 13.45 lakh from Rs 16.83 lakh despite the revenue increase. Trading reported a Rs 3.35 lakh segment loss, compared with a Rs 2.82 lakh profit a year earlier. Consequently, the two segments generated Rs 10.10 lakh together, versus Rs 19.65 lakh in the prior-year first half.

The quarterly pattern was also weaker in the September quarter than the June quarter. Revenue from operations was Rs 99.27 lakh for the quarter ended 30 September 2026, compared with Rs 1.2915 crore for the quarter ended 30 June 2026. The combined segment result changed from a Rs 16.54 lakh profit in June to a Rs 6.44 lakh loss in September, with real estate moving from a Rs 17.16 lakh profit to a Rs 3.71 lakh loss.

What do cash flow and the balance sheet show?

Kemp used Rs 78.46 lakh in operating activities during the six months ended 30 September 2026, compared with Rs 14.76 lakh used in the previous corresponding period. Trade receivables increased by Rs 82 lakh and inventories rose by Rs 5.88 lakh, while other current liabilities increased by Rs 32.89 lakh. Direct taxes paid were Rs 10.47 lakh.

Investing activities generated Rs 58.48 lakh of cash, against Rs 3.41 lakh in the previous first half. The filing records Rs 3.35 crore of investment purchases, Rs 3.21 lakh of dividends received and Rs 1.77 lakh from sale of property, plant and equipment. No financing cash flow was reported for either first-half period.

Cash and cash equivalents declined by Rs 19.98 lakh to Rs 8.24 lakh at 30 September 2026, from Rs 28.22 lakh at 31 March 2026. Total assets increased to Rs 174.2491 crore from Rs 170.6012 crore over the same period, while total equity rose to Rs 167.8519 crore from Rs 165.096 crore.

How did Kemp’s investments and liabilities change?

Kemp held more current and non-current investments at 30 September 2026 than at the preceding year-end. Current investments were Rs 84.9127 crore, up from Rs 82.7283 crore at 31 March 2026, while non-current investments rose to Rs 40.7372 crore from Rs 39.122 crore. Together, these two investment balances totalled Rs 125.6499 crore at the half-year date.

Investment property was Rs 44.6672 crore at 30 September 2026, compared with Rs 45.4007 crore at 31 March 2026. Property, plant and equipment was Rs 9.47 lakh, versus Rs 10.68 lakh. Trade receivables increased to Rs 1.5066 crore from Rs 68.66 lakh, consistent with the working-capital outflow reported in the cash-flow statement.

Total liabilities were Rs 6.3972 crore at 30 September 2026, compared with Rs 5.5052 crore at 31 March 2026. Deferred tax liabilities rose to Rs 4.6418 crore from Rs 4.1567 crore, while current liabilities increased to Rs 1.4562 crore from Rs 1.0389 crore. The financial statements were reviewed by the statutory auditors, who said nothing had come to their attention to indicate a material misstatement.

Conclusion

Kemp’s first-half return to profit reflects a changed earnings mix rather than improved profitability across its reported operating segments. Revenue from operations increased to Rs 2.2841 crore, led by real estate, but combined trading and real-estate profit fell to Rs 10.10 lakh. The Rs 2.5648 crore FVTPL gain and Rs 1.5499 crore of net unallocable income were material to the Rs 1.3587 crore reported profit.

The next result will indicate whether the September-quarter combined segment loss of Rs 6.44 lakh reverses and whether financial-asset gains recur. Kemp’s 4 November 2026 filing provides no operating target, earnings guidance or scheduled business event beyond the board’s approval of the unaudited quarter and half-year results.