NOCIL operating cash flow turns negative on working capital

NOCIL Limited reported standalone net cash used in operating activities of Rs 52.38 crore for the six months ended September 30, 2026, compared with an inflow of Rs 134.13 crore a year earlier. Inventories and trade receivables together absorbed Rs 162.12 crore, exceeding the Rs 78.40 crore operating profit before working-capital changes.

Why did NOCIL’s operating cash flow turn negative?

NOCIL’s operating cash flow turned negative because working-capital movements used Rs 132.53 crore in the six months ended September 30, 2026, compared with a Rs 94.19 crore cash source in the corresponding prior-year period. The Rs 226.72 crore reversal in working capital was larger than the Rs 26.99 crore increase in operating profit before working-capital changes, which rose to Rs 78.40 crore from Rs 51.41 crore.

Cash generated from operations was negative Rs 54.13 crore, against positive Rs 145.60 crore in the six months ended September 30, 2025. The cash-flow statement recorded Rs 1.75 crore under net income taxes paid in the 2026 period, resulting in net cash used in operating activities of Rs 52.38 crore; the prior-year inflow after the Rs 11.47 crore tax item was Rs 134.13 crore.

How much did inventory and receivables increase at NOCIL?

NOCIL’s inventories increased by Rs 90.32 crore and trade receivables increased by Rs 71.80 crore in the six months ended September 30, 2026. Together, those movements absorbed Rs 162.12 crore of cash, whereas inventories released Rs 77.06 crore and receivables released Rs 36.15 crore in the prior-year period, a combined Rs 113.21 crore source of cash.

The standalone balance sheet shows inventories of Rs 247.76 crore at September 30, 2026, compared with Rs 157.44 crore at March 31, 2026. Trade receivables rose to Rs 361.56 crore from Rs 289.53 crore over the same period, making the receivables increase of Rs 72.03 crore broadly consistent with the Rs 71.80 crore cash-flow movement.

Other current and non-current assets used Rs 13.86 crore, while other financial assets used Rs 8.24 crore. These outflows were partly offset by a Rs 47.49 crore increase in trade payables, a Rs 4.87 crore increase in other current liabilities and a Rs 2.56 crore increase in provisions, but the offsets did not cover the inventory and receivables movements.

Did NOCIL’s profit rise while cash generation declined?

Yes. NOCIL’s standalone profit after tax rose to Rs 51.16 crore for the six months ended September 30, 2026, from Rs 33.84 crore a year earlier, while revenue from operations increased to Rs 829.91 crore from Rs 656.78 crore. Profit before tax increased to Rs 64.48 crore from Rs 45.52 crore, even as operating cash flow changed from a Rs 134.13 crore inflow to a Rs 52.38 crore outflow.

The cash-flow reconciliation starts with profit before tax of Rs 64.48 crore and records depreciation and amortisation expense of Rs 27.08 crore, compared with Rs 26.64 crore a year earlier. It also deducts interest income of Rs 9.81 crore and dividend income of Rs 1.25 crore, leaving operating profit before working-capital changes of Rs 78.40 crore.

The income statement recorded a negative Rs 56.76 crore change in inventories of finished goods, work-in-progress and stock-in-trade for the six-month period, compared with a positive Rs 6.82 crore change a year earlier. That expense-line movement differs from the Rs 90.32 crore increase in inventories in the cash-flow statement, which reflects the balance-sheet movement in inventory.

What changed in NOCIL’s liquidity and investments?

NOCIL’s standalone cash and cash equivalents fell to Rs 24.17 crore at September 30, 2026, from Rs 30.65 crore at March 31, 2026, a decrease of Rs 6.48 crore. In the six months ended September 30, 2025, cash and cash equivalents declined by Rs 0.71 crore to Rs 22.05 crore.

Investing activities generated Rs 73.35 crore in the 2026 period, compared with Rs 98.95 crore used in the previous-year period. NOCIL received Rs 530.94 crore from redemptions of financial assets and paid Rs 400.93 crore to acquire them, while current investments declined to Rs 176.59 crore at September 30, 2026, from Rs 301.90 crore at March 31, 2026.

Payments to acquire property, plant and equipment were Rs 70.56 crore, lower than Rs 103.11 crore in the earlier six-month period. Capital work-in-progress increased to Rs 271.75 crore from Rs 220.49 crore, while property, plant and equipment decreased to Rs 586.09 crore from Rs 598.67 crore after Rs 27.08 crore of depreciation and amortisation.

How did consolidated cash flow compare with NOCIL’s standalone result?

NOCIL’s consolidated net cash used in operating activities was Rs 53.08 crore for the six months ended September 30, 2026, compared with the standalone outflow of Rs 52.38 crore. Consolidated operating profit before working-capital changes was Rs 80.00 crore, but consolidated working-capital changes used Rs 134.41 crore, resulting in cash used in operations of Rs 54.41 crore before the Rs 1.33 crore tax item.

On a consolidated basis, trade receivables used Rs 70.17 crore and inventories used Rs 90.51 crore, partly offset by a Rs 44.82 crore increase in trade payables. NOCIL reported one operating segment, the manufacture of rubber chemicals, and consolidated its wholly owned subsidiary, PIL Chemicals Limited; the difference between consolidated and standalone operating cash outflow was Rs 0.70 crore.

Conclusion

NOCIL’s six-month results show that higher reported earnings did not translate into operating cash during the period. Revenue increased by Rs 173.13 crore and standalone profit after tax by Rs 17.32 crore, but the Rs 132.53 crore working-capital outflow, principally from inventory and receivables, produced negative operating cash flow.

The disclosed balance-sheet movements leave inventory of Rs 247.76 crore and trade receivables of Rs 361.56 crore at September 30, 2026, compared with Rs 157.44 crore and Rs 289.53 crore at March 31, 2026. Further movements in those balances, together with capital work-in-progress of Rs 271.75 crore, will remain relevant to NOCIL’s future cash-flow position.