Meghmani Organics receivables rise 30% as cash flow improves

Meghmani Organics Limited generated Rs 110.91 crore of net operating cash in the half year ended September 30, 2026, up from Rs 66.83 crore a year earlier, while trade receivables rose 29.63% to Rs 871.26 crore from Rs 672.13 crore at March 31, 2026. The receivables increase absorbed Rs 226.49 crore of cash during the period.

Why did Meghmani Organics’ operating cash flow improve?

Meghmani Organics’ operating cash flow improved because operating profit before working-capital changes rose to Rs 212.45 crore in the half year ended September 30, 2026, from Rs 139.12 crore in the corresponding 2025 period. Cash generated from operations was Rs 103.36 crore, compared with Rs 76.20 crore a year earlier, before direct taxes.

Profit before tax increased to Rs 114.94 crore from Rs 50.39 crore over the comparison period. The cash-flow reconciliation included depreciation and amortisation of Rs 60.09 crore, finance cost of Rs 28.02 crore and an unrealised foreign-exchange loss of Rs 14.92 crore; the prior-year period had recorded an unrealised foreign-exchange gain of Rs 18.32 crore.

Direct taxes produced a net Rs 7.55 crore refund in the September 2026 half year, compared with net tax paid of Rs 9.37 crore in the prior-year half. That change lifted net cash generated from operating activities to Rs 110.91 crore, an increase of Rs 44.08 crore, despite a Rs 109.09 crore adverse movement in working capital.

How much did Meghmani Organics’ trade receivables increase?

Meghmani Organics’ trade receivables increased by Rs 199.13 crore, or 29.63%, to Rs 871.26 crore at September 30, 2026 from Rs 672.13 crore at March 31, 2026. The balance-sheet movement followed half-year revenue from operations of Rs 1,209.75 crore, compared with Rs 1,190.88 crore in the corresponding 2025 period.

The cash-flow statement records Rs 226.49 crore absorbed by the increase in trade receivables in the half year ended September 30, 2026. This was lower than the Rs 234.12 crore cash outflow from receivables in the prior-year half, but it was still the largest disclosed working-capital use in the current period.

The filing also records Rs 2.88 crore of bad debts written off and a Rs 0.52 crore provision for doubtful debt in the September 2026 half year. These charges appeared in the reconciliation from profit before tax to operating cash flow, alongside the Rs 226.49 crore cash absorption from the receivables movement.

What other working-capital movements affected Meghmani Organics’ cash?

Meghmani Organics’ inventories rose to Rs 567.95 crore at September 30, 2026 from Rs 528.55 crore at March 31, 2026, and the increase used Rs 39.41 crore of cash. In the corresponding 2025 half year, inventories had released Rs 17.13 crore of cash, making the inventory movement less favourable year on year.

Trade payables provided an offset, with the cash-flow statement reporting a Rs 139.26 crore increase during the September 2026 half year, versus an increase of Rs 146.45 crore a year earlier. On the balance sheet, trade payables were Rs 669.88 crore at September 30, including Rs 9.45 crore owed to micro and small enterprises, compared with Rs 540.18 crore at March 31.

Other working-capital lines also added cash. Other assets released Rs 5.12 crore, other liabilities added Rs 8.55 crore and provisions added Rs 3.83 crore in the September 2026 half year. Those movements did not fully offset the combined Rs 265.90 crore cash use from receivables and inventories.

Which Meghmani Organics businesses changed profitability?

Meghmani Organics’ pigments segment recorded a Rs 10.12 crore profit in the half year ended September 30, 2026, compared with a Rs 31.96 crore loss in the corresponding 2025 period. Pigment revenue increased to Rs 330.86 crore from Rs 280.90 crore, while segment assets were Rs 1,137.92 crore at September 30, 2026.

Agrochemicals remained the larger revenue business, contributing Rs 888.36 crore in the September 2026 half year, against Rs 900.53 crore a year earlier. Its segment result declined to Rs 123.20 crore from Rs 150.53 crore, meaning the consolidated profit improvement included a pigment turnaround alongside lower agrochemicals revenue and segment profit.

The other segment, comprising merchant trading and crop nutrition, reported revenue of Rs 53.14 crore and a segment profit of Rs 10.12 crore. It had reported Rs 36.26 crore of revenue and a Rs 1.03 crore segment loss in the prior-year half, while total segment results across the three businesses rose to Rs 143.44 crore from Rs 117.53 crore.

How did repayments reduce Meghmani Organics’ cash balance?

Meghmani Organics used Rs 97.47 crore in financing activities in the half year ended September 30, 2026, compared with Rs 37.35 crore in the previous-year period. Financing cash outflows included Rs 64.89 crore of term-loan repayments and Rs 35.68 crore of finance costs paid, partly offset by Rs 3.10 crore of net proceeds from short-term borrowings.

Investing activities used another Rs 20.05 crore, including Rs 31.92 crore spent on property, plant, equipment, capital work-in-progress and intangible assets. Operating inflows therefore did not result in a higher cash balance: cash and cash equivalents fell by Rs 6.61 crore during the half year to Rs 9.20 crore at September 30, 2026.

Balance-sheet borrowings declined to Rs 664.22 crore at September 30, 2026 from Rs 725.96 crore at March 31, 2026. Non-current borrowings fell to Rs 112.60 crore from Rs 160.97 crore, while current borrowings reduced to Rs 551.62 crore from Rs 565.00 crore.

Conclusion

Meghmani Organics reported higher operating cash generation in the September 2026 half year as profit before tax and operating profit before working-capital changes increased. However, the Rs 199.13 crore rise in receivables and Rs 39.41 crore inventory-related cash use remained material calls on cash, while financing and investing outflows reduced closing cash and cash equivalents to Rs 9.20 crore.

The next disclosed matter to watch is the proposed amalgamation of Kilburn Chemicals Limited and Meghmani Crop Nutrition Limited into Meghmani Organics. The Ahmedabad Bench of the National Company Law Tribunal approved the scheme on October 8, 2026, with an appointed date of January 1, 2026, but the company said it had not become effective at September 30 and no accounting effect had yet been recorded.