Oriental Aromatics H1 cash outflow narrows to Rs 15.8092 crore

Oriental Aromatics Limited reported a consolidated operating cash outflow of Rs 15.8092 crore for the half year ended September 30, 2026, compared with an outflow of Rs 30.421 crore a year earlier, as Rs 109.1453 crore absorbed by receivables and inventories exceeded its Rs 46.6781 crore operating profit before working-capital changes.

What drove Oriental Aromatics' operating cash outflow?

Oriental Aromatics remained cash-negative from operations because working-capital movements outweighed operating profit in the half year ended September 30, 2026. Trade and other receivables absorbed Rs 42.127 crore, while inventories absorbed Rs 67.0183 crore. A Rs 57.79 crore increase in trade payables and provisions partly offset those uses, leaving cash generated from operations before tax at an outflow of Rs 4.6772 crore.

Net direct taxes paid were Rs 11.132 crore, taking the operating cash outflow to Rs 15.8092 crore. In the half year ended September 30, 2025, cash generated before tax was an outflow of Rs 25.6995 crore and net taxes paid were Rs 4.7215 crore, resulting in a Rs 30.421 crore operating cash outflow. The outflow therefore narrowed by Rs 14.6118 crore year on year, despite tax payments increasing by Rs 6.4105 crore.

How did inventories and receivables affect Oriental Aromatics' cash flow?

Oriental Aromatics recorded a substantially higher inventory cash use in the latest half year. Inventory absorbed Rs 67.0183 crore, more than twice the Rs 28.2727 crore absorbed in the corresponding 2025 period. Receivables used Rs 42.127 crore, against Rs 39.9078 crore a year earlier. Together, these two working-capital items consumed Rs 109.1453 crore, Rs 40.9648 crore more than in the prior-year half.

The September 30, 2026 consolidated balance sheet showed inventories of Rs 447.1694 crore, up from Rs 380.1511 crore at March 31, 2026. Trade receivables rose to Rs 278.144 crore from Rs 252.3299 crore over the same six-month period. Other current assets also increased to Rs 71.6297 crore from Rs 56.0341 crore, while total current assets rose to Rs 808.7877 crore from Rs 703.9937 crore.

Payables and provisions supplied a larger cash offset than in the earlier period, contributing Rs 57.79 crore compared with Rs 4.6653 crore in the half year ended September 30, 2025. Dues to creditors other than micro and small enterprises were Rs 116.8856 crore at September 30, 2026, up from Rs 60.4747 crore at March 31. Dues to micro and small enterprises increased to Rs 25.2987 crore from Rs 22.8431 crore.

Did Oriental Aromatics' operating profit improve in H1?

Oriental Aromatics increased operating profit before working-capital changes to Rs 46.6781 crore in the half year ended September 30, 2026, from Rs 37.8157 crore a year earlier. The Rs 8.8624 crore increase accompanied a rise in consolidated profit before tax to Rs 14.5969 crore from Rs 5.2796 crore, with the cash-flow reconciliation also including depreciation, finance costs and other specified adjustments.

Consolidated revenue from operations increased to Rs 578.0079 crore from Rs 496.8487 crore in the comparable half year, a rise of Rs 81.1592 crore. Cost of materials consumed rose to Rs 401.5284 crore from Rs 321.2267 crore. Finance costs, net of income, declined to Rs 16.4462 crore from Rs 17.7914 crore, while depreciation and amortisation were Rs 15.5234 crore compared with Rs 15.5065 crore.

The filing identifies Fine Chemicals as Oriental Aromatics' only reportable segment under Indian Accounting Standard 108. Consolidated net profit for the half year was Rs 8.3022 crore, compared with Rs 1.2423 crore a year earlier. The increase in earnings did not produce positive operating cash flow because the Rs 109.1453 crore cash use from receivables and inventories was greater than the Rs 46.6781 crore operating profit before working-capital changes.

How did Oriental Aromatics fund its cash requirements?

Oriental Aromatics generated Rs 22.8247 crore from financing activities in the half year ended September 30, 2026, mainly through net short-term borrowing proceeds of Rs 43.6403 crore. It repaid Rs 1.4333 crore of long-term borrowings, paid Rs 17.4749 crore of interest and other finance costs, paid a Rs 1.6827 crore dividend and made Rs 0.2247 crore of lease-liability payments. Financing inflow was below the Rs 25.8418 crore recorded a year earlier.

Investing activities used Rs 10.8379 crore, compared with Rs 3.8748 crore in the previous corresponding half year, entirely for purchases of property, plant and equipment. After the operating and investing outflows and financing inflow, cash and cash equivalents decreased by Rs 3.8225 crore. Closing cash and cash equivalents stood at Rs 9.3053 crore on September 30, 2026, compared with Rs 13.1278 crore at March 31, 2026.

Current borrowings were Rs 386.4332 crore at September 30, 2026, up from Rs 347.2315 crore six months earlier. Non-current borrowings were Rs 56.5479 crore, compared with Rs 54.8333 crore at March 31. Total current liabilities increased to Rs 540.8175 crore from Rs 443.0662 crore, including the higher trade-payable balances recorded during the period.

Conclusion

Oriental Aromatics reduced its consolidated operating cash outflow by Rs 14.6118 crore year on year, supported by a Rs 8.8624 crore increase in operating profit before working-capital changes and a Rs 53.1247 crore larger contribution from payables and provisions. However, the Rs 109.1453 crore cash absorption by inventories and receivables kept operating cash flow negative at Rs 15.8092 crore, even as half-year revenue rose to Rs 578.0079 crore.

The unresolved matter disclosed by the September 30, 2026 statements is the conversion of higher working-capital balances into cash. Inventories were Rs 447.1694 crore and receivables were Rs 278.144 crore at period-end, while current borrowings were Rs 386.4332 crore. Subsequent results will show whether these balances decline or continue to require funding.