Nirlon Q2 net profit falls 51% after prior tax reversal lapses

Nirlon Limited reported profit after tax of Rs 71.8896 crore for the quarter ended September 30, 2026, down 51.3% from Rs 147.6640 crore a year earlier. The decline reflected the absence of a Rs 69.5051 crore deferred-tax reversal in the comparable quarter, while profit before tax rose 3.3% to Rs 96.1012 crore.

Why did Nirlon's Q2 net profit fall?

Nirlon's Q2 net profit fell because the comparable quarter included a one-off deferred-tax benefit that did not recur. Profit after tax was Rs 71.8896 crore in the quarter ended September 30, 2026, compared with Rs 147.6640 crore in the quarter ended September 30, 2025. Basic and diluted earnings per share, which were not annualised, declined to Rs 7.98 from Rs 16.39.

The tax line changed from a credit of Rs 54.6321 crore in the prior-year quarter to an expense of Rs 24.2116 crore in Q2. In financial year 2025-26, Nirlon exercised the option under Section 115BAA of the Income Tax Act, 1961, known as the new tax regime, and remeasured its opening deferred-tax liability. That remeasurement produced the Rs 69.5051 crore reversal recorded in the September 2025 quarter. Current tax rose to Rs 22.5828 crore from Rs 11.9510 crore, while deferred tax was Rs 1.9490 crore against Rs 2.9220 crore.

How did Nirlon's underlying operations perform?

Nirlon's pre-tax result increased despite the reported decline in profit after tax. Revenue from operations rose 2.3% year on year to Rs 169.0816 crore in Q2 from Rs 165.3085 crore, and other income increased to Rs 5.0522 crore from Rs 3.5450 crore. This lifted total income to Rs 174.1338 crore, compared with Rs 168.8535 crore a year earlier.

Total expenses rose 2.9% to Rs 78.0326 crore from Rs 75.8216 crore, leaving profit before tax at Rs 96.1012 crore versus Rs 93.0319 crore. Finance costs increased to Rs 26.4807 crore from Rs 26.0892 crore, while depreciation and amortisation rose to Rs 13.9483 crore from Rs 13.7949 crore. Property-management expenses declined to Rs 14.6395 crore from Rs 14.8769 crore, whereas other expenses increased to Rs 21.3674 crore from Rs 19.4964 crore.

Nirlon identifies licensing of investment properties as its sole reportable segment under Indian Accounting Standard 108, or Ind AS 108, on operating segments. The company therefore did not provide a segment-by-segment revenue or profit split. The reported revenue growth, expense movements and pre-tax increase all relate to this single reportable business for the September 2026 quarter.

What does Nirlon's first-half result show?

Nirlon's first-half profit after tax also declined because the earlier tax reversal was included in the comparative period. For the six months ended September 30, 2026, profit after tax was Rs 141.2685 crore, down from Rs 206.0715 crore in the six months ended September 30, 2025. Profit before tax increased 3.4% to Rs 189.4075 crore from Rs 183.1851 crore, while revenue from operations rose 2.8% to Rs 337.3870 crore.

The first-half tax position moved to an expense of Rs 48.1390 crore from a credit of Rs 22.8864 crore in the prior-year period. The earlier period incorporated the same Rs 69.5051 crore remeasurement reversal. Higher income exceeded the rise in total expenses, which increased to Rs 157.3893 crore from Rs 152.7157 crore.

Net cash flow from operating activities increased during the six-month period. It was Rs 237.7362 crore for the six months ended September 30, 2026, compared with Rs 199.9106 crore a year earlier, after income taxes paid of Rs 45.3764 crore. Profit before tax was Rs 189.4075 crore, while finance costs in the operating cash-flow reconciliation were Rs 52.7640 crore, down from Rs 53.9990 crore.

What changed in Nirlon's balance sheet and cash flows?

Nirlon's total assets increased to Rs 2,261.2720 crore as of September 30, 2026 from Rs 2,249.6910 crore at March 31, 2026. Investment properties declined to Rs 1,792.0404 crore from Rs 1,831.4284 crore, while capital work-in-progress rose to Rs 23.2632 crore from Rs 7.0228 crore. Total current assets increased to Rs 385.6105 crore from Rs 337.9314 crore, led by bank balances other than cash equivalents of Rs 315.3733 crore.

Borrowings changed materially between classifications. Non-current borrowings decreased to Rs 1,089.5933 crore at September 30 from Rs 1,146.6663 crore at March 31, while current borrowings increased to Rs 57.5751 crore from Rs 0.2313 crore. Cash and cash equivalents rose to Rs 30.9541 crore from Rs 9.9534 crore after a net increase of Rs 21.0007 crore during the six months.

Investing cash outflow was Rs 39.7254 crore for the six months, compared with Rs 20.0017 crore in the previous year's period. Nirlon spent Rs 20.3326 crore on property, plant and equipment and investment properties, including capital work-in-progress, and had Rs 27.5468 crore of net investment in fixed deposits. Financing cash outflow reached Rs 177.0101 crore, including a dividend payment of Rs 135.1771 crore.

Conclusion

Nirlon's September-quarter earnings comparison was primarily shaped by tax accounting rather than a decline in pre-tax profit. Revenue from operations rose to Rs 169.0816 crore and profit before tax reached Rs 96.1012 crore, but profit after tax fell to Rs 71.8896 crore because the September 2025 result included the Rs 69.5051 crore deferred-tax reversal arising from the new tax regime.

The next reported comparison will show how revenue, property-management costs and finance costs develop within Nirlon's sole licensing-of-investment-properties segment. The balance sheet shows Rs 23.2632 crore of capital work-in-progress at September 30, 2026, up from Rs 7.0228 crore at March 31, while Nirlon has not disclosed a completion date or spending target for that work.