Phychem September-half revenue rose 10.5%, cash flow negative

Phychem Technologies Limited reported revenue from operations of Rs 31.21 crore and profit after tax of Rs 1.79 crore for the half year ended September 30, 2026, up 10.5% and 9.6% year on year, respectively, but operating activities used Rs 3.60 crore of cash as working-capital balances increased.

What were Phychem's September-half revenue and profit figures?

Phychem recorded Rs 31.21 crore of revenue from operations in the half year ended September 30, 2026, compared with Rs 28.24 crore in the half year ended September 30, 2025. Total income increased to Rs 31.51 crore from Rs 28.74 crore, while profit after tax rose to Rs 1.79 crore from Rs 1.63 crore.

Revenue increased by Rs 2.97 crore year on year, whereas profit after tax increased by Rs 15.69 lakh. Profit before tax rose to Rs 2.37 crore from Rs 2.24 crore, despite other income declining to Rs 30.25 lakh from Rs 49.99 lakh. Basic and diluted earnings per share were Rs 1.75, compared with Rs 2.17 in the corresponding prior-year half.

Phychem's revenue also exceeded the Rs 28.22 crore reported in the half year ended March 31, 2026. However, profit after tax was below Rs 2.46 crore in that immediately preceding half, while profit before tax was below Rs 3.31 crore. The filing identifies the September 2026 results as unaudited and the March 2026 comparative as audited.

Which costs changed in Phychem's September half?

Phychem's total expenses increased to Rs 29.14 crore in the September 2026 half from Rs 26.50 crore a year earlier, an increase of Rs 2.64 crore. Cost of materials consumed rose by Rs 2.94 crore to Rs 23.90 crore, exceeding the overall increase in total expenses.

Purchases of stock-in-trade increased to Rs 1.73 crore from Rs 90.56 lakh, while employee benefit expense rose to Rs 73.18 lakh from Rs 53.89 lakh. Depreciation and amortisation increased to Rs 27.16 lakh from Rs 25.99 lakh. These movements were partly offset by a Rs 69.03 lakh credit from changes in inventories of finished goods, work-in-progress and stock-in-trade, compared with a Rs 49.34 lakh expense in the previous September half.

Finance cost declined to Rs 35.87 lakh from Rs 46.89 lakh, and other expenses declined marginally to Rs 2.84 crore from Rs 2.88 crore. Current tax was Rs 50.61 lakh and deferred tax was Rs 7.46 lakh, taking total tax expense to Rs 58.07 lakh, compared with Rs 60.63 lakh a year earlier.

Why did Phychem report negative operating cash flow?

Phychem reported net cash used in operating activities of Rs 3.60 crore for the half year ended September 30, 2026. The outflow followed operating profit before working-capital changes of Rs 2.64 crore, but working-capital movements absorbed Rs 5.73 crore and income tax paid was Rs 50.61 lakh.

Inventories absorbed Rs 2.83 crore of cash and trade receivables absorbed Rs 2.54 crore during the period. Short-term loans and advances used a further Rs 77.50 lakh. The cash uses were partly offset by a Rs 1.73 crore increase in trade payables and a Rs 62.10 lakh increase in other current liabilities.

The balance sheet shows inventories at Rs 12.36 crore on September 30, 2026, up from Rs 9.53 crore on March 31, 2026. Trade receivables increased to Rs 8.37 crore from Rs 5.83 crore over the same period. Cash generated from operations was negative Rs 3.09 crore before income tax paid, resulting in the Rs 3.60 crore operating cash outflow.

How did financing and investment affect Phychem's cash balance?

Phychem generated Rs 11.74 crore from financing activities in the September 2026 half, comprising Rs 2.70 crore of proceeds from issue of share capital and Rs 9.29 crore of changes in securities premium. It also repaid Rs 25.24 lakh of long-term borrowings during the period.

The financing inflow exceeded the Rs 3.60 crore operating outflow and Rs 2.59 crore used in investing activities. Cash and cash equivalents consequently increased by Rs 5.55 crore, from Rs 69.18 lakh at the beginning of the period to Rs 6.24 crore at September 30, 2026. Closing cash comprised Rs 13.26 lakh of cash on hand and Rs 6.10 crore of other bank balances.

Share capital rose to Rs 10.24 crore at September 30 from Rs 7.54 crore at March 31, while reserves and surplus rose to Rs 17.33 crore from Rs 6.25 crore. Short-term borrowings fell to Rs 3.24 crore from Rs 5.23 crore, and long-term borrowings declined to Rs 42.72 lakh from Rs 67.96 lakh. Plant, property and equipment increased to Rs 6.24 crore from Rs 5.75 crore.

How had Phychem used IPO proceeds by September 30?

Phychem had utilised Rs 8.65 crore of Rs 14.58 crore in initial public offering, or IPO, proceeds by September 30, 2026, leaving Rs 5.93 crore unutilised, according to the statutory auditors' certificate. The certificate states that the unutilised sums were temporarily held in a separate bank account.

The company had fully utilised Rs 3 crore earmarked for working-capital requirements. It had used Rs 2.24 crore of the Rs 5.15 crore allocated to plant and machinery, leaving Rs 2.91 crore unutilised for that objective. None of the Rs 2.50 crore allocated to repayment of specified borrowings had been utilised by September 30.

Phychem had also utilised Rs 82.07 lakh of Rs 1.13 crore allocated to general corporate purposes and Rs 2.59 crore of Rs 2.80 crore for issue-related expenses. The remaining amounts for those objectives were Rs 31.20 lakh and Rs 20.64 lakh, respectively. The cash-flow statement separately records Rs 75.76 lakh of fixed-asset purchases and Rs 1.84 crore of loans and advances given in the September half.

Conclusion

Phychem's September 2026 half combined year-on-year growth in revenue and profit with a reversal in operating cash generation. Revenue rose by Rs 2.97 crore and profit after tax by Rs 15.69 lakh from the September 2025 half, while inventory and trade-receivable movements together absorbed Rs 5.37 crore of cash and contributed to the Rs 3.60 crore operating outflow.

The disclosed item to watch next is deployment of the Rs 5.93 crore of IPO proceeds unutilised at September 30, including Rs 2.50 crore intended for repayment of borrowings and Rs 2.91 crore for plant and machinery. The September-half results were reviewed by the audit committee and approved by the board on November 7, 2026, following a limited review by the statutory auditors.