KP Green Engineering H1 profit fell 41% as costs rose

KP Green Engineering Limited reported standalone revenue from operations of Rs 678.76 crore for the half year ended 30 September 2026, up 28% year on year, while net profit fell 41% to Rs 34.43 crore as employee costs, finance costs and depreciation increased. The board approved the unaudited results on 13 November 2026.

Why did KP Green Engineering’s H1 profit fall despite higher revenue?

KP Green Engineering’s profit fell because expenses increased faster than income in the half year ended 30 September 2026. Total income rose 27% year on year to Rs 682.02 crore from Rs 535.98 crore, while total expenses increased 38% to Rs 632.32 crore from Rs 457.42 crore. Profit before tax consequently declined to Rs 49.69 crore from Rs 78.56 crore.

Employee benefits expense rose to Rs 22.87 crore from Rs 8.33 crore in the corresponding half year. Finance costs increased to Rs 33.99 crore from Rs 15.69 crore, while depreciation and amortisation expense rose to Rs 35.67 crore from Rs 7.82 crore. Those three expense lines increased by a combined Rs 60.69 crore.

KP Green Engineering’s profit for the period was Rs 34.43 crore, compared with Rs 58.31 crore a year earlier, after tax expense declined to Rs 15.26 crore from Rs 20.12 crore. The lower tax expense did not offset the Rs 28.87 crore decline in profit before tax. Basic earnings per share fell to Rs 6.89 from Rs 11.66.

How did KP Green Engineering’s revenue mix change in H1?

KP Green Engineering’s revenue growth was led by sales of products, which increased 27% to Rs 672.16 crore for the half year ended 30 September 2026 from Rs 531.16 crore a year earlier. Revenue from services rose to Rs 6.60 crore from Rs 0.91 crore. Product sales accounted for nearly all of the Rs 678.76 crore revenue from operations in both periods.

KP Green Engineering identifies Fabrication and Galvanizing as its single segment. The company therefore does not provide a separate revenue or profit breakdown between those activities under Indian Accounting Standard 108, which governs segment reporting. Its disclosed results instead present product and service revenue lines for the standalone business.

Revenue from operations was lower than the Rs 713.50 crore reported in the half year ended 31 March 2026. Profit for the period was also below the preceding half year’s Rs 77.44 crore. The sequential change followed a Rs 33.74 crore decline in revenue from operations and a Rs 43.00 crore decline in profit for the period.

Other income was Rs 3.26 crore in the September 2026 half year, compared with Rs 3.91 crore in the corresponding previous-year period and Rs 0.45 crore in the half year ended 31 March 2026. Total income nevertheless increased by Rs 146.04 crore year on year, while total expenses increased by Rs 174.90 crore, producing the decline in pre-tax profit.

What changed in KP Green Engineering’s balance sheet?

KP Green Engineering’s total assets increased to Rs 1,831.35 crore at 30 September 2026 from Rs 1,586.56 crore at 31 March 2026. Non-current assets rose to Rs 804.71 crore from Rs 654.37 crore, while current assets increased to Rs 1,026.64 crore from Rs 932.19 crore.

Right-of-use assets increased to Rs 225.48 crore from Rs 84.23 crore, and capital work-in-progress rose to Rs 34.31 crore from Rs 12.92 crore. Other non-current assets were Rs 54.15 crore at 30 September 2026, compared with nil at 31 March 2026. Property, plant and equipment declined to Rs 429.24 crore from Rs 455.50 crore during a half year that recorded Rs 35.67 crore of depreciation and amortisation.

KP Green Engineering’s non-current borrowings increased to Rs 77.77 crore from Rs 34.70 crore, while current borrowings rose to Rs 369.63 crore from Rs 226.90 crore. Combined reported borrowings were therefore Rs 447.40 crore at 30 September 2026, versus Rs 261.59 crore at 31 March 2026. These borrowing figures exclude lease liabilities reported separately on the balance sheet.

Inventories declined to Rs 425.14 crore from Rs 464.99 crore, while trade receivables increased to Rs 331.66 crore from Rs 316.01 crore. Trade payables to creditors other than micro and small enterprises declined to Rs 502.04 crore from Rs 665.73 crore. Current lease liabilities of Rs 65.24 crore were also reported at 30 September 2026, compared with no such line at 31 March 2026.

Why was KP Green Engineering’s operating cash flow negative?

KP Green Engineering used Rs 110.22 crore in net operating cash flow in the half year ended 30 September 2026, compared with generating Rs 56.96 crore in the corresponding half year of 2025. The reversal occurred even as operating profit before working-capital changes rose to Rs 121.89 crore from Rs 101.93 crore.

The cash-flow statement records a Rs 150.80 crore decrease in trade payables, a Rs 127.43 crore increase in other current and non-current assets, and a Rs 28.22 crore increase in other financial assets. These movements outweighed a Rs 39.60 crore inventory reduction and a Rs 38.40 crore decrease in short-term and long-term advances and loans. Net direct tax paid was Rs 1.54 crore.

Net cash used in investing activities narrowed to Rs 11.17 crore from Rs 148.96 crore a year earlier. KP Green Engineering paid Rs 161.83 crore for purchases of fixed assets and received Rs 140.51 crore from the sale of fixed assets. Advances to capital vendors were Rs 7.33 crore during the September 2026 half year.

Net financing cash flow was an inflow of Rs 127.44 crore, compared with an Rs 87.54 crore inflow in the year-earlier half. The statement records Rs 142.73 crore of proceeds from short-term borrowings and Rs 47.64 crore from long-term borrowings, alongside Rs 33.99 crore of interest paid and Rs 24.38 crore of lease-liability payments. Cash and cash equivalents, including bank balances, ended the half year at Rs 15.02 crore.

Conclusion

KP Green Engineering delivered higher standalone sales in the half year ended 30 September 2026, but the increase in employee, finance and depreciation costs exceeded income growth and reduced profit before tax and net profit. The balance sheet expanded by Rs 244.79 crore from 31 March 2026, while operating activities used Rs 110.22 crore of cash and reported borrowings increased by Rs 185.81 crore.

The next disclosed event is the shareholder vote at the 11 December 2026 extraordinary general meeting on the proposed preferential issue of up to 34,24,657 fully convertible warrants to promoter-category investor Dr. Faruk G. Patel at Rs 292 each. The proposed issue aggregates to about Rs 100 crore, with 25% payable on allotment and the remaining 75% due on exercise; the warrants have an 18-month tenor from allotment.