Kesoram revenue rises 53% but core quarterly loss persists

Kesoram Industries Limited reported consolidated revenue from operations of Rs 84.49 crore for the quarter ended September 30, 2026, up 53% from a year earlier, but its loss before exceptional items and tax was Rs 16.96 crore and current borrowings rose to Rs 147.50 crore.

Did Kesoram’s September-quarter revenue increase?

Yes. Kesoram’s consolidated revenue from operations increased to Rs 84.49 crore in the three months ended September 30, 2026, from Rs 55.17 crore in the corresponding quarter of 2025. Revenue also rose from Rs 77.66 crore in the preceding three months ended June 30, 2026, showing growth on both year-on-year and sequential comparisons.

Total income reached Rs 91.97 crore in the September 2026 quarter, compared with Rs 59.20 crore a year earlier and Rs 78.24 crore in June 2026. Other income, however, fell to Rs 4.84 crore from Rs 10.21 crore in the September 2025 quarter and Rs 5.79 crore in the June 2026 quarter, meaning the increase in total income chiefly reflected revenue from operations.

Kesoram has one reportable segment, Rayon, Transparent Paper and Chemicals, under Indian Accounting Standard 108, Operating Segments. The filing therefore does not give revenue or profitability by individual product line for the quarter ended September 30, 2026.

Why did Kesoram remain loss-making before exceptional items?

Kesoram remained loss-making before exceptional items and tax because its total expenses of Rs 108.93 crore exceeded total income of Rs 91.97 crore by Rs 16.96 crore in the September 2026 quarter. The pre-exceptional loss narrowed from Rs 25.87 crore in the September 2025 quarter and Rs 20.63 crore in the June 2026 quarter, but did not turn into a profit.

Cost of materials consumed was the largest expense at Rs 63.73 crore, up from Rs 32.62 crore a year earlier and Rs 54.08 crore in the preceding quarter. Finance costs rose to Rs 7.95 crore from Rs 6.15 crore in September 2025 and Rs 6.61 crore in June 2026, while employee-benefit expense declined year on year to Rs 15.90 crore from Rs 17.84 crore.

Power and fuel expense fell to Rs 8.62 crore in the September 2026 quarter from Rs 10.03 crore a year earlier, while other expenses declined to Rs 9.38 crore from Rs 12.80 crore. These lower cost lines coincided with the narrower quarterly pre-exceptional loss, although higher material consumption and finance costs remained part of the expense base.

For the six months ended September 30, 2026, revenue from operations increased to Rs 162.15 crore from Rs 116.22 crore in the prior-year period. Yet the six-month loss before exceptional items and tax widened to Rs 37.59 crore from Rs 35.49 crore, showing that the first-quarter loss of Rs 20.63 crore offset the September-quarter improvement.

What produced Kesoram’s reported September-quarter profit before tax?

Kesoram reported profit before tax of Rs 42.45 crore in the September 2026 quarter because it recognised an exceptional item of Rs 59.41 crore. Excluding that item, the consolidated result was the Rs 16.96 crore loss before exceptional items and tax reported for the quarter.

The exceptional item relates to legal proceedings against Kesoram Textiles Mill Limited for recovery of outstanding receivables and interest. Subsequent to September 30, 2026, an arbitral award dated November 9, 2026 awarded Kesoram Rs 59.89 crore, comprising Rs 9.55 crore of principal and Rs 50.34 crore of interest calculated through November 8, 2026.

Kesoram recognised Rs 59.41 crore in the September-quarter results, representing the principal and interest accrued through September 30, 2026. The principal receivable had been written off in earlier years, according to the filing, and the company said the recognition followed the award and acceptance from the counterparty.

The quarter included tax expense of Rs 9.70 crore, compared with no tax expense in the corresponding 2025 quarter. Basic and diluted earnings per share were Rs 1.05 for the September 2026 quarter, against a loss per share of Rs 0.83 a year earlier; the September figure includes the exceptional-item recognition.

How did Kesoram’s borrowings and current position change?

Kesoram’s consolidated current borrowings increased to Rs 147.50 crore at September 30, 2026 from Rs 88.64 crore at March 31, 2026, an increase of Rs 58.86 crore in six months. Non-current borrowings declined to Rs 104.91 crore from Rs 129.53 crore over the same period.

Current assets rose to Rs 158.17 crore at September 30 from Rs 106.74 crore at March 31, led in part by other financial assets of Rs 70.46 crore versus Rs 11.36 crore. Current liabilities nevertheless increased to Rs 222.48 crore from Rs 162.51 crore, leaving current liabilities Rs 64.31 crore above current assets at September 30, compared with Rs 55.77 crore at March 31.

Cash and cash equivalents stood at Rs 38.28 lakh at September 30, 2026, down from Rs 2.86 crore at March 31, 2026. On September 12, 2026, Frontier Warehousing Limited acquired 42.80% of Kesoram’s equity share capital from erstwhile promoter and promoter-group members, resulting in a change in control and management.

Did Kesoram generate operating cash in the first half?

No. Kesoram used Rs 25.40 crore in consolidated operating activities during the six months ended September 30, 2026, compared with Rs 51.89 crore used in the corresponding six months of 2025. The smaller cash outflow followed operating profit before working-capital changes of Rs 38.47 crore, compared with an operating loss of Rs 25.03 crore in the prior-year period.

Working-capital movements absorbed that operating surplus. Trade receivables, financial assets and other assets used Rs 56.74 crore, inventories used Rs 3.25 crore, and changes in trade payables, financial liabilities and provisions used Rs 4.26 crore during the six-month period.

Financing activities generated Rs 22.89 crore in the first half, against cash used of Rs 115.30 crore a year earlier. Kesoram received Rs 132 crore from non-current borrowings and Rs 68.47 crore from current borrowings, while repaying Rs 156.66 crore of non-current borrowings and Rs 8.81 crore of current borrowings.

Frontier Warehousing issued a letter of support stating its commitment to provide financial assistance to cover liabilities falling due in the foreseeable future. Kesoram said this support was part of the basis for preparing the September 2026 financial results on a going-concern basis.

Conclusion

Kesoram’s September-quarter revenue growth and narrower pre-exceptional loss mark an improvement from both the year-earlier and June 2026 quarters. However, the reported Rs 42.45 crore profit before tax depended on the Rs 59.41 crore exceptional item, while six-month operating cash outflow was Rs 25.40 crore and current borrowings rose to Rs 147.50 crore.

The next disclosures will show whether growth in Rayon, Transparent Paper and Chemicals can translate into a pre-exceptional profit and lower working-capital cash use. They will also show progress on the recognised Rs 59.41 crore award-related receivable and whether Frontier Warehousing’s disclosed support is needed for liabilities falling due in the foreseeable future.