KSE cash falls to Rs 7.25 crore after half-year outflows

KSE Limited ended the half year to September 30, 2026 with cash and cash equivalents of Rs 7.2485 crore, down Rs 20.5204 crore from the opening balance, after using Rs 20.7908 crore in operating activities and paying Rs 23.724 crore in dividends. Investing activities generated Rs 25.2529 crore and partly offset those outflows.

Why did KSE’s cash balance fall in the half year?

KSE’s cash and cash equivalents fell from Rs 27.7689 crore at the beginning of the half year to Rs 7.2485 crore at September 30, 2026. The Rs 20.5204 crore decline was larger than the Rs 4.627 crore fall reported in the corresponding half year ended September 30, 2025, when closing cash and cash equivalents were Rs 11.7601 crore.

The cash movement reflected operating and financing outflows that exceeded the investing inflow. KSE used Rs 20.7908 crore in operating activities, generated Rs 25.2529 crore from investing activities and used Rs 24.9825 crore in financing activities. Together, those three categories reconciled to the reported Rs 20.5204 crore decrease in cash and cash equivalents.

The closing cash figure is narrower than KSE’s total liquid financial assets. At September 30, 2026, the balance sheet showed current investments of Rs 106.6084 crore and bank balances other than cash equivalents of Rs 27.0904 crore, in addition to Rs 7.2485 crore of cash and cash equivalents. The cash-flow statement separately identifies deposits not treated as cash equivalents.

What caused KSE’s operating cash outflow?

KSE used Rs 20.7908 crore in operating activities in the half year ended September 2026, compared with net cash generated from operating activities of Rs 50.1016 crore a year earlier. Cash generated from operations before income-tax payments was negative Rs 18.9002 crore, and income-tax paid was Rs 1.8906 crore.

Working-capital movements accounted for much of the cash use. Inventories absorbed Rs 14.8233 crore, while trade receivables, loans, advances and other current assets used Rs 5.5572 crore. Trade payables, other current liabilities and provisions provided Rs 0.3681 crore, but this was insufficient to offset the inventory and other current-asset movements.

The operating cash reversal occurred alongside a sharp change in reported earnings. KSE recorded a half-year loss after tax of Rs 28.59 lakh, compared with profit after tax of Rs 71.4261 crore in the half year ended September 2025. Profit before exceptional items and tax was Rs 6.8 lakh, against Rs 95.7091 crore in the earlier period.

Revenue did increase, but expenses rose by more. Revenue from operations reached Rs 919.8223 crore, up from Rs 843.3908 crore, while total expenses rose to Rs 925.8568 crore from Rs 755.8452 crore. Total income was Rs 925.7888 crore, leaving the company with a small loss before exceptional items and tax despite higher sales.

Which business segments changed during the half year?

KSE’s Animal Feed Division reported a segment loss of Rs 4.3538 crore for the half year ended September 2026, compared with a profit of Rs 35.8691 crore a year earlier. The division generated segment revenue of Rs 765.8929 crore, up from Rs 687.173 crore, but its segment result moved into loss.

Oil Cake Processing reported segment profit of Rs 3.5648 crore, down from Rs 59.5225 crore in the prior-year half year. Its revenue rose to Rs 235.2258 crore from Rs 214.0389 crore. Dairy recorded segment profit of Rs 35.44 lakh, reversing a segment loss of Rs 4.0359 crore, while revenue increased to Rs 35.5822 crore from Rs 29.8371 crore.

KSE also reported Rs 47.17 lakh of exceptional income in the latest half year. The company said this was a further insurance claim for flood-related raw-material damage in Tamil Nadu during financial year 2023-24; it had already received Rs 2.5075 crore for those damages in financial year 2024-25. The exceptional item lifted profit before tax to Rs 40.37 lakh.

After a current-tax charge of Rs 1.5 crore and a deferred-tax credit of Rs 81.04 lakh, KSE reported the Rs 28.59 lakh half-year loss. The company’s unaudited results were approved by the board on November 12, 2026, after audit committee review, and the statutory auditor issued an unmodified limited-review conclusion.

How did investments and dividends affect KSE’s cash?

KSE generated Rs 25.2529 crore from investing activities, compared with Rs 11.949 crore in the corresponding half year. Investment redemptions totalled Rs 207.3072 crore and exceeded purchases of Rs 166.5813 crore, while Rs 15 crore was placed in bank deposits not treated as cash equivalents.

The investing cash flow also included Rs 62.84 lakh spent on property, plant and equipment and Rs 17.99 lakh received from sale or compensation on acquisition of property, plant and equipment. In the operating-cash-flow adjustments, KSE recorded a Rs 2.9648 crore gain on sale of current investments classified at fair value and a Rs 1.1135 crore net gain on investments measured at fair value through profit or loss.

Financing activities used Rs 24.9825 crore, with dividend payments of Rs 23.724 crore accounting for most of that amount. Dividends paid were Rs 7.602 crore higher than the Rs 16.122 crore paid in the first half of the previous year. Finance costs paid were Rs 1.0027 crore.

Other financing movements were relatively limited. KSE reported Rs 2.9677 crore of public-deposit acceptances and Rs 2.9589 crore of public-deposit repayments, as well as a Rs 1.14 lakh increase in short-term bank borrowings. The financing cash flow also included a Rs 27.6 lakh change in other bank deposits.

Conclusion

KSE’s Rs 20.5204 crore fall in half-year cash and cash equivalents reflected a shift from operating cash generation in the prior-year period to a Rs 20.7908 crore operating outflow, alongside Rs 23.724 crore of dividend payments. Investment redemptions produced a Rs 25.2529 crore investing inflow, but did not prevent cash equivalents from closing at Rs 7.2485 crore.

The next reported development to watch is management’s reassessment of the Rs 1.81 crore probable impairment provision on land acquired in August 2021 for approximately Rs 7.24 crore. An interim injunction restraining alienation remains in force over a disputed 25% undivided interest, and KSE says the provision will be reassessed as legal proceedings, legal advice and reliable valuation evidence develop.