Krystal Integrated Services posts negative first-half cash flow

Krystal Integrated Services Limited reported an operating cash outflow of Rs 7.621 crore for the half year ended September 30, 2026, despite Rs 42.034 crore of profit before tax, as working-capital movements used Rs 50.695 crore, including Rs 81.788 crore for receivables, loans and other assets.

Why did Krystal Integrated Services post negative operating cash flow?

Krystal Integrated Services posted negative cash flow from operating activities because working-capital movements and tax payments exceeded operating profit. The group generated operating profit before changes in working capital of Rs 57.948 crore in the half year ended September 30, 2026, but working-capital changes absorbed Rs 50.695 crore and tax paid was Rs 14.874 crore, resulting in an operating cash outflow of Rs 7.621 crore.

The cash result differed from the income-statement outcome for the same six-month period. Profit before tax from continuing operations was Rs 42.034 crore and profit for the period was Rs 36.122 crore, compared with Rs 34.975 crore and Rs 29.603 crore, respectively, in the half year ended September 30, 2025. The cash-flow statement shows that reported profit had not converted into operating cash by September 30, 2026.

The disclosed cash-flow comparator is the full year ended March 31, 2026, rather than the prior first half. In that full year, Krystal Integrated Services generated Rs 26.460 crore from operations despite a Rs 69.692 crore working-capital outflow. The half-year result ended below zero after tax paid of Rs 14.874 crore.

What changed in Krystal Integrated Services working capital?

Krystal Integrated Services recorded a Rs 81.788 crore outflow under trade receivables, loans, other financial assets and other assets during the half year ended September 30, 2026. A further Rs 13.608 crore was used in financial and other assets, while inventories used Rs 0.158 crore. These outflows were partly offset by a Rs 40.022 crore inflow from trade payables, other financial liabilities, other liabilities and provisions, plus Rs 4.836 crore from provisions.

Trade receivables were Rs 497.891 crore at September 30, 2026, up Rs 85.509 crore from Rs 412.382 crore at March 31, 2026. The balance sheet also showed other current assets rising to Rs 39.818 crore from Rs 25.443 crore and current income-tax assets increasing to Rs 10.170 crore from Rs 1.678 crore. Loans fell to Rs 133.765 crore from Rs 146.447 crore, even as the combined cash-flow line covering receivables, loans and other assets was an outflow.

The movement in creditor and liability balances varied by category. Dues to micro and small enterprises increased to Rs 8.336 crore at September 30 from Rs 5.344 crore at March 31, while payables to other creditors declined to Rs 47.689 crore from Rs 54.708 crore. Other financial liabilities rose to Rs 117.236 crore from Rs 93.751 crore, and other current liabilities increased to Rs 66.085 crore from Rs 45.433 crore.

How was Krystal Integrated Services cash balance funded?

Krystal Integrated Services increased cash and cash equivalents by Rs 25.663 crore during the half year, to Rs 59.309 crore at September 30, 2026 from Rs 33.646 crore at the start of the financial year. The increase was supported by a Rs 21.433 crore net financing inflow and an Rs 11.851 crore investing inflow, which together exceeded the Rs 7.621 crore operating outflow.

Financing cash flow included Rs 22.811 crore of net proceeds from long-term borrowings and Rs 10.969 crore from short-term borrowings. These inflows were reduced by Rs 9.522 crore of interest payments, Rs 2.096 crore of final-dividend payments and Rs 0.730 crore of lease-liability payments. Non-current borrowings rose to Rs 26.581 crore from Rs 3.769 crore, while current borrowings increased to Rs 118.061 crore from Rs 107.218 crore.

Investing activities produced Rs 11.851 crore of net cash in the half year, compared with a Rs 21.755 crore outflow in the year ended March 31, 2026. The half-year figure included Rs 12.682 crore under the cash-flow line for loans to related parties and others, Rs 2.039 crore from bank deposits with original maturity above 12 months, and Rs 1.052 crore of interest received, partly offset by Rs 5.205 crore spent on property, plant and equipment.

Did Krystal Integrated Services grow revenue and profit despite the cash outflow?

Krystal Integrated Services increased revenue and profit in the half year despite the negative operating cash flow. Revenue from operations rose to Rs 775.178 crore for the half year ended September 30, 2026 from Rs 606.481 crore a year earlier, while profit before tax increased to Rs 42.034 crore from Rs 34.975 crore. Total comprehensive income was Rs 36.528 crore, compared with Rs 28.563 crore in the previous corresponding period.

Manpower and Related Services was the largest reported business segment, contributing Rs 704.970 crore of half-year revenue and Rs 37.648 crore of segment profit before tax. Catering and Related Services reported Rs 69.230 crore of revenue and Rs 4.348 crore of profit before tax. Information Technology Enabled Services reported Rs 1.250 crore of revenue and Rs 38 lakh of profit before tax, compared with Rs 6.572 crore of revenue and Rs 39 lakh of profit before tax in the prior-year half.

The consolidated results include Citelum India Private Limited as a wholly owned subsidiary from June 29, 2026. September-quarter revenue from operations was Rs 414.467 crore, compared with Rs 360.710 crore in the June 2026 quarter and Rs 283.400 crore in the September 2025 quarter. The board approved the consolidated half-year results on November 2, 2026, and the statutory auditors conducted a limited review.

Conclusion

Krystal Integrated Services combined higher first-half revenue of Rs 775.178 crore and profit before tax of Rs 42.034 crore with a negative operating cash flow of Rs 7.621 crore. The main cash-flow factor was the Rs 81.788 crore use attributed to receivables, loans and other assets, only partly offset by Rs 40.022 crore from payables and other liabilities.

The disclosed unresolved item is Rs 62.7 lakh of initial public offering proceeds earmarked for issue-related expenses that remained unutilised in the public offer account at the reporting date. Krystal Integrated Services said it had used Rs 19.320 crore of the Rs 19.947 crore initially earmarked for those expenses.