KSR Footwear first-half operating cash flow turns negative

KSR Footwear Limited used Rs 1.94 crore in operating activities during the six months ended 30 September 2026, as inventory absorbed Rs 10.63 crore and receivables, loans, advances and other assets used Rs 5.67 crore. KSR Footwear reported profit after tax of Rs 60.7 lakh for the period, compared with a loss a year earlier.

What caused KSR Footwear's operating cash flow to turn negative?

KSR Footwear's operating cash flow turned negative because working-capital outflows exceeded its operating profit before those movements. Operating profit before working-capital changes was Rs 6.63 crore in the six months ended 30 September 2026, against an operating loss of Rs 10.25 crore at the same stage in the corresponding six months of 2025.

Inventories used Rs 10.63 crore of cash in the latest first half, while trade receivables, loans, advances and other assets used another Rs 5.67 crore. Trade payables, other liabilities and provisions generated Rs 7.75 crore, partly offsetting those uses. Cash generated from operations was nevertheless negative Rs 1.92 crore, and net income tax paid of Rs 2.3 lakh took net cash used in operating activities to Rs 1.94 crore.

The year-on-year shift was primarily in inventory. In the six months ended 30 September 2025, inventories generated Rs 14.91 crore of cash; in the latest period, they consumed Rs 10.63 crore. The receivables, loans, advances and other-assets category also had a larger outflow, rising from Rs 1.69 crore in the prior-year period to Rs 5.67 crore in 2026.

How much did KSR Footwear's inventory and receivables rise?

KSR Footwear's inventories rose Rs 10.63 crore to Rs 71.87 crore at 30 September 2026 from Rs 61.24 crore in the audited balance-sheet comparator. That balance-sheet increase is consistent with the Rs 10.63 crore cash absorbed by inventories in the six-month cash-flow statement.

Trade receivables increased Rs 3.47 crore to Rs 52.65 crore from Rs 49.18 crore in the audited comparator. Other current assets also rose, reaching Rs 14.84 crore from Rs 12.90 crore. The cash-flow statement's Rs 5.67 crore outflow is broader than trade receivables alone because it includes loans, advances and other assets as well.

Inventories and trade receivables together stood at Rs 124.52 crore at 30 September 2026, compared with Rs 110.42 crore in the audited comparator. The Rs 14.10 crore combined increase was larger than the Rs 60.7 lakh profit after tax recorded in the six months, showing that the reported profit and the period's cash conversion moved differently.

Did KSR Footwear's earnings improve in the first half?

KSR Footwear's reported earnings improved in the six months ended 30 September 2026 despite the operating cash outflow. Revenue from operations increased to Rs 101.24 crore from Rs 94.49 crore in the corresponding six months of 2025, a rise of Rs 6.75 crore.

Profit before tax was Rs 82.1 lakh, compared with a loss before tax of Rs 13.39 crore a year earlier. KSR Footwear reported profit after tax of Rs 60.7 lakh, compared with a loss after tax of Rs 13.97 crore in the corresponding period. Total comprehensive income was Rs 64.5 lakh, against a total comprehensive loss of Rs 13.93 crore.

Depreciation and amortisation fell to Rs 4.05 crore from Rs 5.72 crore, while finance costs declined to Rs 1.75 crore from Rs 2.04 crore. For the quarter ended 30 September 2026, revenue from operations was Rs 50.99 crore and profit after tax was Rs 28.9 lakh, compared with revenue of Rs 52.25 crore and profit after tax of Rs 31.8 lakh in the preceding June 2026 quarter.

What happened to KSR Footwear's cash and funding balances?

KSR Footwear's cash and cash equivalents were Rs 2.59 crore at 30 September 2026, compared with Rs 1.96 crore in the audited balance-sheet comparator. Its cash-flow statement also reported cash-credit facilities of Rs 18.99 crore at period end, producing net cash and cash equivalents of negative Rs 16.40 crore.

Net cash and cash equivalents declined by Rs 2.25 crore during the six months, from negative Rs 14.15 crore at the start of the period to negative Rs 16.40 crore at the end. The reported movement reflects Rs 1.94 crore used in operations, Rs 1.48 crore used in investing activities and Rs 1.17 crore generated from financing activities.

Investing activity included Rs 82.2 lakh spent on property, plant, equipment and intangible assets, Rs 5.81 crore invested in bank deposits and Rs 5.04 crore received from deposit maturities. Financing cash flow included Rs 3.95 crore from the reported long-term loan movement, offset by Rs 97.4 lakh of interest paid and Rs 1.80 crore of lease-liability repayment. Current borrowings were Rs 19.27 crore at 30 September 2026, compared with Rs 16.11 crore in the audited comparator.

What disclosures could affect KSR Footwear next?

KSR Footwear disclosed that it operates in one business segment, footwear, under Indian Accounting Standard 108, Operating Segments. The filing therefore does not provide product-level cash flow, inventory or receivables data for the Rs 101.24 crore of first-half revenue.

KSR Footwear also disclosed an unresolved regulatory matter concerning the four Labour Codes notified by the Government of India on 21 November 2025 and the related Central Rules notified on 8 May 2026. The company said West Bengal draft rules remained subject to final notification and that it would provide appropriate accounting effect if subsequent developments required it.

Conclusion

KSR Footwear returned to a Rs 60.7 lakh first-half profit and increased revenue by Rs 6.75 crore year on year, but it used Rs 1.94 crore in operating cash as inventory absorbed Rs 10.63 crore and the broader receivables, advances and other-assets category used Rs 5.67 crore. The contrast shows that the first-half profit recovery did not produce positive operating cash generation.

The next disclosures will show whether the Rs 71.87 crore inventory balance, Rs 52.65 crore trade-receivables balance and Rs 18.99 crore cash-credit facility change after 30 September 2026. KSR Footwear also said it continues to monitor the finalisation of West Bengal Labour Code rules and government clarifications before recording any further accounting effect.