MRF operating cash flow falls to Rs 1,238.76 crore in half-year

MRF Limited reported Rs 1,238.76 crore of standalone net cash from operating activities for the half year ended 30 September 2026, down from Rs 2,015.93 crore a year earlier, as a Rs 1,745.97 crore increase in inventories and a Rs 416.63 crore receivables outflow absorbed cash.

Why did MRF’s operating cash flow decline?

MRF’s operating cash flow declined by Rs 777.17 crore year on year in the half year ended 30 September 2026. Cash generated from operations fell to Rs 1,374.50 crore from Rs 2,211.26 crore, while direct taxes paid were Rs 135.74 crore, compared with Rs 195.33 crore in the corresponding 2025 period.

Profit before tax was Rs 1,122.67 crore, down from Rs 1,333.14 crore in the prior-year half, and operating profit before working-capital changes decreased to Rs 1,908.48 crore from Rs 2,192.95 crore. Depreciation added back to cash profit rose to Rs 913.79 crore from Rs 870.22 crore, but did not offset the lower profit and working-capital movements.

Revenue from operations increased to Rs 16,815.52 crore from Rs 14,809.96 crore in the six months to 30 September 2026. However, profit from continuing operations decreased to Rs 843.52 crore from Rs 995.82 crore, alongside the decline in cash generated before and after working-capital changes.

How much cash did MRF’s inventory build consume?

MRF’s inventory build consumed Rs 1,745.97 crore of cash in the half year ended 30 September 2026. Finished goods absorbed Rs 748.34 crore and raw materials and other inventory absorbed Rs 997.63 crore; in the previous corresponding half, finished goods released Rs 448.36 crore while raw materials and others absorbed Rs 209.51 crore.

Standalone inventories stood at Rs 7,083.63 crore on 30 September 2026, compared with Rs 5,337.66 crore on 31 March 2026. The Rs 1,745.97 crore balance-sheet increase matches the combined inventory movements reported in the cash-flow statement for the six-month period.

Trade receivables used Rs 416.63 crore of cash, against Rs 175.80 crore in the prior-year half. Receivables rose to Rs 3,887.98 crore at 30 September 2026 from Rs 3,477.27 crore at 31 March 2026, while other receivables absorbed Rs 29.52 crore compared with Rs 152.32 crore a year earlier.

How did payables and facilities fund MRF’s working capital?

MRF’s higher payables partly offset inventory and receivables outflows, with import acceptances and other trade payables adding Rs 1,254.53 crore of cash. Supplier finance added Rs 186.25 crore, other liabilities added Rs 175.20 crore and provisions added Rs 42.16 crore in the 2026 half year.

Trade payables to creditors other than micro and small enterprises rose to Rs 5,988.36 crore on 30 September 2026 from Rs 4,567.45 crore at 31 March 2026. Dues to micro and small enterprises increased to Rs 70.92 crore from Rs 54.95 crore, while other current liabilities rose to Rs 2,768.67 crore from Rs 2,575.55 crore.

MRF recorded Rs 531.38 crore of net proceeds from working-capital facilities in financing cash flow, compared with net repayments of Rs 133.93 crore in the corresponding 2025 period. Current borrowings were Rs 1,105.51 crore at 30 September 2026, up from Rs 674.09 crore at 31 March 2026.

Non-current borrowings declined to Rs 76.83 crore from Rs 176.02 crore after Rs 200 crore of term-loan repayments during the half year. The financing statement also recorded Rs 104.24 crore of lease-liability payments, Rs 106.35 crore of interest paid and Rs 97.12 crore of dividends paid.

What capital spending and investment cash flows did MRF report?

MRF used Rs 1,357.26 crore in investing activities in the half year ended 30 September 2026, compared with Rs 1,537.32 crore a year earlier. Purchases of property, plant and equipment were Rs 1,001.60 crore, up from Rs 618.42 crore, while sale proceeds from such assets increased to Rs 229.50 crore from Rs 104 crore.

Fixed-deposit placements used Rs 1,633.38 crore and proceeds from fixed deposits were Rs 340 crore in the 2026 half year. Bank balances other than cash and cash equivalents increased to Rs 4,778.63 crore at 30 September 2026 from Rs 1,763.97 crore at 31 March 2026.

Capital work-in-progress rose to Rs 1,207.59 crore from Rs 1,032.57 crore over the six months. Property, plant and equipment declined to Rs 11,728.41 crore from Rs 12,042.37 crore, while other intangible assets increased to Rs 62.39 crore from Rs 20.56 crore.

What happened to MRF’s cash balance and balance sheet?

MRF’s cash and cash equivalents declined by Rs 94.13 crore during the half year to Rs 162.02 crore on 30 September 2026. The opening balance was Rs 260.84 crore, and the cash-flow statement included a Rs 4.69 crore unrealised foreign-currency loss; cash had declined by Rs 156.87 crore in the corresponding 2025 half.

Total equity rose to Rs 21,207.75 crore at 30 September 2026 from Rs 20,451.95 crore at 31 March 2026. Total liabilities increased to Rs 12,982.64 crore from Rs 10,844.51 crore, while total assets rose to Rs 34,190.39 crore from Rs 31,296.46 crore.

The standalone results and cash-flow statement for the half year ended 30 September 2026 were approved by MRF’s board on 10 November 2026. The statutory auditors conducted a limited review and stated that nothing had come to their attention indicating a material misstatement in the standalone financial results.

Conclusion

The six-month figures show that higher inventories and receivables absorbed more cash than the increase in payables could offset, while lower profit before tax also reduced pre-working-capital cash generation. MRF funded part of the working-capital movement through Rs 531.38 crore of net proceeds from working-capital facilities and continued Rs 1,001.60 crore of property, plant and equipment purchases.

The next disclosed event is MRF’s interim dividend of Rs 3 per equity share. The record date is 17 November 2026, and MRF said payment would be made on or after 1 December 2026; subsequent financial disclosures will show whether inventories of Rs 7,083.63 crore and current borrowings of Rs 1,105.51 crore change further.