Kranti Industries H1 profit falls 71% as costs outpace sales

Kranti Industries Limited reported consolidated profit after tax of Rs 49.99 lakh for the six months ended 30 September 2026, down 71% from Rs 1.75 crore a year earlier, despite revenue from operations rising 12% to Rs 50.62 crore. Total expenses increased 17% to Rs 50.46 crore, led by employee benefits, finance costs and other expenses.

Why did Kranti Industries’ H1 profit fall despite revenue growth?

Kranti Industries’ profit fell because the increase in its expense base exceeded the rise in income during the six months ended 30 September 2026. Revenue from operations rose to Rs 50.62 crore from Rs 45.20 crore in the corresponding 2025 period, while total income, including other income, increased to Rs 51.15 crore from Rs 45.58 crore.

Total expenses rose to Rs 50.46 crore from Rs 43.02 crore, leaving a consolidated profit before tax of Rs 69.08 lakh, compared with Rs 2.57 crore a year earlier. The gap between total income and expenses therefore narrowed sharply even as revenue increased by Rs 5.42 crore.

Profit after tax was Rs 49.99 lakh, versus Rs 1.75 crore in the prior-year half. Basic and diluted earnings per share, which are not annualised, declined to Rs 0.39 from Rs 1.38. Total comprehensive income was Rs 54.46 lakh, compared with Rs 1.79 crore, after Rs 4.47 lakh of other comprehensive income in the latest half-year.

The tax comparison also changed between the two periods. Kranti Industries reported current tax of Rs 37.42 lakh and a deferred-tax credit of Rs 18.33 lakh in H1 2026-27, compared with current tax of Rs 50.68 lakh, deferred tax of Rs 57.59 lakh and a Rs 26.75 lakh minimum alternate tax credit entitlement in H1 2025-26.

Which Kranti Industries costs rose faster than revenue?

Employee benefit expense rose faster than revenue, increasing 60% to Rs 10.72 crore from Rs 6.69 crore while revenue grew 12% in H1 2026-27. Finance cost increased 24% to Rs 2.46 crore from Rs 1.98 crore, depreciation and amortisation rose 13% to Rs 4.06 crore, and other expenses increased 15% to Rs 8.88 crore.

Material consumption, the largest reported cost line, increased 2% to Rs 28.61 crore from Rs 28.08 crore. However, the credit from changes in inventories of finished goods, work-in-progress and stock-in-trade narrowed to Rs 4.27 crore from Rs 5.03 crore, providing a smaller offset to the expense base than in the prior-year half.

Total expenses rose by Rs 7.44 crore, exceeding the Rs 5.57 crore increase in total income. The filing does not provide management’s operational explanation for the increases in employee benefits, finance cost or other expenses, so the reported figures establish the cost movements rather than their specific causes.

Other income increased to Rs 52.86 lakh from Rs 38.05 lakh in the six months ended 30 September 2026. That increase did not offset the higher expense lines, with finance cost and depreciation together amounting to Rs 6.52 crore, compared with Rs 5.56 crore in the corresponding prior-year period.

How did Kranti Industries’ September-quarter earnings change?

Kranti Industries returned to a consolidated quarterly profit of Rs 59.07 lakh in the quarter ended 30 September 2026 after a Rs 9.08 lakh loss in the June 2026 quarter, although profit remained below Rs 1.16 crore in the September 2025 quarter. Profit before tax was Rs 86.43 lakh, compared with a pre-tax loss of Rs 17.35 lakh in the preceding quarter.

Quarterly revenue from operations was Rs 25.16 crore, 9% above Rs 23.16 crore in the September 2025 quarter but below Rs 25.47 crore in the June 2026 quarter. Total quarterly income was Rs 25.43 crore and total expenses were Rs 24.60 crore, producing profit before tax after the share of profit from equity-accounted investees.

Employee benefit expense in the September 2026 quarter was Rs 5.21 crore, compared with Rs 3.41 crore a year earlier. Other expenses were Rs 4.65 crore against Rs 4.39 crore, while finance cost rose to Rs 1.18 crore from Rs 1.00 crore. These movements left quarterly profit after tax below the prior-year quarter despite higher revenue.

Kranti Industries recorded a Rs 3.55 lakh share of profit from equity-accounted investees in the September 2026 quarter, following a Rs 3.55 lakh loss in the June quarter. Its notes state that associate Krako Precision Private Limited commenced commercial operations during the September 2026 quarter.

What do Kranti Industries’ cash flow and balance sheet show?

Kranti Industries generated net operating cash flow of Rs 4.33 crore in the six months ended 30 September 2026, compared with Rs 12.44 crore in the corresponding 2025 period. The cash-flow statement records a Rs 9.04 crore increase in inventories, partly offset by a Rs 6.90 crore reduction in trade receivables and a Rs 3.43 lakh increase in trade payables.

Cash used in investing activities was Rs 3.21 crore, including Rs 3.71 crore spent on property, plant and equipment, intangible assets and capital work-in-progress. Financing activities used Rs 1.14 crore after Rs 1.67 crore of net short-term borrowing proceeds, Rs 2.19 crore of interest paid and Rs 81.36 lakh of lease-principal payments.

Consolidated inventories stood at Rs 38.92 crore on 30 September 2026, up from Rs 29.88 crore on 31 March 2026. Trade receivables declined to Rs 11.19 crore from Rs 18.09 crore, while cash and cash equivalents were Rs 10.74 lakh, compared with Rs 13.18 lakh at the March 2026 year-end.

Total consolidated assets increased to Rs 123.68 crore from Rs 120.80 crore at 31 March 2026, while total liabilities rose to Rs 79.15 crore from Rs 76.82 crore. Current borrowings increased to Rs 24.68 crore from Rs 23.01 crore and non-current borrowings rose to Rs 19.28 crore from Rs 18.82 crore; total equity increased to Rs 44.53 crore from Rs 43.99 crore.

Conclusion

Kranti Industries’ H1 results show that 12% revenue growth did not translate into higher earnings because total expenses rose 17% and the inventory-related credit was smaller than in the prior-year period. Consolidated profit after tax of Rs 49.99 lakh and earnings per share of Rs 0.39 were below the six months ended 30 September 2025, even though the September 2026 quarter returned to profit from the June-quarter loss.

The next results will show whether employee benefits of Rs 10.72 crore, finance cost of Rs 2.46 crore and inventory of Rs 38.92 crore change relative to revenue. Kranti Industries also disclosed that it acquired a 35% stake in Krako Precision Private Limited on 22 October 2025; the associate began commercial operations in the quarter ended 30 September 2026 and is accounted for using the equity method.