Naapbooks profit rises 6% despite 32% revenue decline

Naapbooks Limited reported standalone profit of Rs 3.50 crore for the half year ended September 30, 2026, up 6% from Rs 3.29 crore a year earlier, although revenue from operations fell 32% to Rs 6.58 crore as development expense declined to nil from Rs 3.57 crore.

Why did Naapbooks profit rise despite lower revenue?

Naapbooks’ profit rose because the reduction in reported expenses exceeded the reduction in income. Revenue from operations declined by Rs 3.14 crore from Rs 9.73 crore in the half year ended September 30, 2025 to Rs 6.58 crore in the latest period. Total income decreased by Rs 3.24 crore to Rs 6.54 crore, as other income moved to a negative Rs 4.39 lakh from positive Rs 5.85 lakh.

Development expense was nil in the September 2026 half year, compared with Rs 3.57 crore in the corresponding prior-year period. Total expenses consequently fell 66% to Rs 1.85 crore from Rs 5.41 crore. The Rs 3.55 crore fall in expenses was larger than the Rs 3.24 crore decline in total income, lifting profit before tax to Rs 4.69 crore from Rs 4.38 crore.

Employee-benefit expense increased to Rs 1.27 crore from Rs 1.10 crore, partly offsetting the decline in development expense. Finance costs fell to Rs 5.04 lakh from Rs 8.08 lakh, while depreciation and amortisation declined to Rs 19.26 lakh from Rs 31.77 lakh. Other expenses were Rs 34.07 lakh, close to Rs 34.37 lakh a year earlier.

How did Naapbooks compare with the preceding half year?

Naapbooks’ September 2026 revenue and profit were lower than in the preceding half year ended March 31, 2026. Revenue from operations was Rs 6.58 crore, down from Rs 7.83 crore, while profit for the period was Rs 3.50 crore, down from Rs 5.01 crore. Profit before tax declined from Rs 6.63 crore to Rs 4.69 crore.

Total expenses rose to Rs 1.85 crore from Rs 1.42 crore in the March 2026 half year. Employee-benefit expense increased to Rs 1.27 crore from Rs 61.63 lakh, while development expense was nil compared with Rs 3.18 lakh. Total income fell to Rs 6.54 crore from Rs 8.05 crore over the two half years.

Tax expense was Rs 1.19 crore in the latest half year, comprising current tax of Rs 1.22 crore offset by deferred tax of Rs 3.15 lakh. The preceding half year had tax expense of Rs 1.62 crore, including current tax of Rs 1.65 crore. Basic and diluted earnings per share were Rs 3.02 for September 2026, versus Rs 4.64 for March 2026 and Rs 3.06 a year earlier; Naapbooks states that these figures are not annualised.

What changed in Naapbooks’ balance sheet?

Naapbooks’ standalone balance-sheet total increased to Rs 61.43 crore at September 30, 2026 from Rs 53.34 crore at March 31, 2026. Shareholders’ funds increased to Rs 52.58 crore from Rs 44.69 crore. Share capital rose to Rs 11.84 crore from Rs 10.83 crore, while reserves and surplus increased to Rs 40.73 crore from Rs 29.83 crore.

Money received against share warrants was nil at September 30, compared with Rs 4.03 crore at March 31. The cash-flow statement recorded Rs 4.38 crore of share and warrant issue proceeds during the half year. Long-term borrowings increased to Rs 33.32 lakh from Rs 29.45 lakh, while short-term borrowings decreased to Rs 69.97 lakh from Rs 1.04 crore.

Intangible assets under development increased by Rs 6.12 crore to Rs 31.20 crore. Short-term loans and advances rose by Rs 2.25 crore to Rs 12.46 crore, while trade receivables were broadly unchanged at Rs 10.42 crore from Rs 10.46 crore. Cash and cash equivalents were Rs 1.78 lakh, compared with Rs 1.18 lakh at March 31.

Did Naapbooks convert profit into operating cash?

Naapbooks generated net cash from operating activities of Rs 1.73 crore in the half year ended September 30, 2026, below profit before tax of Rs 4.69 crore. Operating profit before working-capital changes was Rs 4.93 crore, including Rs 19.26 lakh of depreciation and amortisation and Rs 5.04 lakh of finance and interest expense.

Working-capital changes reduced operating cash by Rs 3.15 crore. The largest outflow was the Rs 2.25 crore increase in short-term loans and advances. Lower trade payables and other current liabilities reduced cash by Rs 36.33 lakh and Rs 29.50 lakh respectively, while the Rs 4.36 lakh reduction in trade receivables provided cash.

Net cash used in investing activities was Rs 6.10 crore, mainly reflecting Rs 6.14 crore of net purchases of fixed assets and intangible assets under development. Financing activities supplied Rs 4.37 crore, including Rs 4.38 crore of share and warrant issue proceeds. These movements produced a Rs 60,000 increase in cash and cash equivalents from the opening balance of Rs 1.18 lakh.

What did Naapbooks disclose on review and dividend?

Naapbooks’ board approved the unaudited standalone and consolidated results on November 13, 2026. Chirag R. Shah & Associates stated in its standalone limited-review report that nothing had come to its attention suggesting the results failed to make required disclosures or contained a material misstatement. The report describes the work as a review rather than an audit.

Naapbooks reported that it has one business segment, making segment disclosure under Accounting Standard 17 inapplicable. The board did not recommend an interim dividend for financial year 2026-27. The standalone debt-equity ratio was 0.02 at September 30, 2026, compared with 0.03 in the March 2026 half year and the September 2025 half year.

The consolidated reviewer also reported a Rs 4.45 lakh share of net loss after tax from three associates for the half year ended September 30, 2026. Those associates’ interim financial information had not been reviewed or audited by their auditors, although the reviewer said management had represented the amounts as not material to Naapbooks and its associated entities.

Conclusion

Naapbooks’ year-on-year profit increase was driven by the removal of Rs 3.57 crore of development expense rather than sales growth, since revenue fell by Rs 3.14 crore to Rs 6.58 crore. Cash conversion was lower than reported pre-tax profit, with a Rs 2.25 crore rise in short-term loans and advances contributing to working-capital outflows.

The next reported results will show whether revenue changes from the September 2026 half-year level of Rs 6.58 crore and whether development expense remains nil. The balance sheet also leaves the Rs 31.20 crore held in intangible assets under development and the board’s decision not to recommend an interim dividend for 2026-27 as disclosed matters to watch.