Marico Limited cash falls Rs 68 crore on investment outflows

Marico Limited recorded a Rs 68 crore decrease in cash and cash equivalents during the half year ended September 30, 2026, closing at Rs 336 crore despite generating Rs 692 crore from operating activities. Investing activities used Rs 878 crore, exceeding the combined Rs 810 crore generated by operations and financing activities.

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

Marico’s cash balance fell because its Rs 878 crore investing outflow was larger than the Rs 692 crore operating inflow and Rs 118 crore financing inflow combined. The result was a Rs 68 crore net decrease in cash and cash equivalents for the half year ended September 30, 2026, compared with a Rs 98 crore increase in the corresponding half year ended September 30, 2025.

Cash and cash equivalents stood at Rs 336 crore at September 30, 2026, down from Rs 404 crore at the beginning of the financial year. In the prior-year half, Marico started with Rs 321 crore and finished with Rs 419 crore, showing that the direction of cash movement reversed even though operating cash generation remained broadly similar.

The main year-on-year change was investing activity, which moved from a Rs 600 crore cash inflow in the September 2025 half year to a Rs 878 crore outflow in the September 2026 half year. Operating cash flow decreased by Rs 9 crore, while financing changed from a Rs 1,203 crore outflow to a Rs 118 crore inflow.

How did working capital affect Marico’s operating cash flow?

Working-capital movements absorbed Rs 640 crore in the half year ended September 30, 2026, compared with Rs 313 crore in the year-earlier period. Operating profit before working-capital changes rose to Rs 1,559 crore from Rs 1,242 crore, but cash generated from operations declined to Rs 919 crore from Rs 929 crore after the larger working-capital use.

Inventory was the biggest use of operating cash at Rs 663 crore, versus Rs 363 crore in the prior-year half. Trade receivables absorbed Rs 402 crore, against Rs 396 crore a year earlier, while other current assets used Rs 313 crore, substantially higher than the Rs 17 crore use reported in the September 2025 half year.

Higher liabilities partly offset those asset movements. Trade payables added Rs 550 crore of cash, compared with Rs 528 crore previously, while other financial liabilities added Rs 178 crore after using Rs 9 crore in the prior-year period. Net income taxes paid were Rs 276 crore and the effect of foreign-currency translation was Rs 49 crore, resulting in net operating cash flow of Rs 692 crore.

The September 30 balance sheet reflects the working-capital build-up. Inventories rose to Rs 2,297 crore from Rs 1,611 crore at March 31, 2026, while trade receivables increased to Rs 1,705 crore from Rs 1,304 crore. Total current assets increased to Rs 7,817 crore from Rs 5,860 crore over the same six-month period.

What drove Marico’s investing cash outflow?

Marico used Rs 878 crore in investing activities during the September 2026 half year, led by Rs 628 crore of net purchases of current investments, Rs 249 crore paid for acquisition of a subsidiary net of cash, and Rs 244 crore spent on property, plant, equipment and intangible assets. The outflow was partly offset by Rs 153 crore of proceeds from non-current investment sales, Rs 53 crore from bank-deposit redemptions and Rs 18 crore of interest received.

The group stated that it acquired 75% of Skinetiq Joint Stock Company and gained control effective April 2, 2026. Skinetiq is incorporated in Vietnam, and Marico said it has an obligation to acquire the remaining non-controlling stake if certain future business milestones are met; that obligation has been recorded at present value with a corresponding debit to other equity.

Investment activity was materially different from the prior-year half. Spending on property, plant, equipment and intangible assets increased to Rs 244 crore from Rs 142 crore, while there was no cash outflow for acquisition of a subsidiary in the September 2025 half year. Net current-investment activity also switched from Rs 192 crore of proceeds in 2025 to a Rs 628 crore outflow in 2026.

Non-current assets increased to Rs 4,561 crore at September 30, 2026 from Rs 4,215 crore at March 31, 2026. Property, plant and equipment rose to Rs 874 crore from Rs 832 crore, capital work-in-progress rose to Rs 144 crore from Rs 85 crore, and goodwill increased to Rs 1,218 crore from Rs 1,036 crore.

How did financing and liabilities change?

Marico generated Rs 118 crore from financing activities in the half year ended September 30, 2026, as Rs 691 crore of net borrowings and Rs 147 crore of share-capital proceeds exceeded distributions and finance-related payments. In contrast, financing activities used Rs 1,203 crore in the prior-year half, including Rs 908 crore of dividends paid to company shareholders.

During the latest half year, Marico paid Rs 519 crore in dividends to company shareholders, Rs 35 crore in interest and Rs 24 crore in dividends to non-controlling interests. It also paid Rs 17 crore towards the principal portion of lease liabilities and Rs 8 crore of lease interest, while the Welfare of Mariconions Trust recorded Rs 117 crore of net investment purchases.

Current borrowings rose to Rs 1,046 crore at September 30, 2026 from Rs 355 crore at March 31, 2026, in line with the Rs 691 crore net borrowing inflow in the cash-flow statement. Total current liabilities increased to Rs 6,388 crore from Rs 4,101 crore, including other financial liabilities of Rs 2,478 crore and trade payables to creditors other than micro and small enterprises of Rs 2,050 crore.

Total assets increased by Rs 2,303 crore to Rs 12,378 crore between March 31 and September 30, 2026, while total liabilities rose by Rs 1,737 crore to Rs 7,318 crore. Total equity rose to Rs 5,060 crore from Rs 4,494 crore, comprising Rs 4,735 crore attributable to owners and Rs 325 crore of non-controlling interests.

Conclusion

Marico’s cash decline in the September 2026 half year reflected the combined effect of a Rs 640 crore working-capital absorption and Rs 878 crore of investment outflows, rather than a lack of operating cash generation. The group generated Rs 692 crore from operations, but cash and cash equivalents fell by Rs 68 crore to Rs 336 crore as investment purchases, acquisition payments and capital expenditure absorbed funds.

The next disclosed transaction to watch is Marico’s staged acquisition of a 38.18% stake in Satiya Nutraceuticals Private Limited. After definitive agreements dated October 5, 2026, Marico acquired 24.09% on a fully diluted basis, while the remaining 14.09% stake is scheduled for completion in July 2027, subject to the agreement terms and conditions.