Polyplex operating cash flow falls 46% as working capital rises

Polyplex Corporation Limited reported Rs 165.42 crore of net cash flow from operating activities for the half year ended September 30, 2026, 46% below Rs 308.34 crore a year earlier, despite profit before tax rising to Rs 431.50 crore from a Rs 47.14 crore loss as working capital absorbed cash.

Why did Polyplex’s operating cash flow fall despite higher profit?

Polyplex’s reported operating cash flow fell because working-capital movements absorbed cash even as its reported profit before tax recovered in the half year ended September 30, 2026. Profit before tax was Rs 431.50 crore, compared with a Rs 47.14 crore loss in the corresponding 2025 period, while operating profit before working-capital changes rose to Rs 670.26 crore from Rs 314.59 crore.

The cash-flow statement records Rs 392.92 crore of cash from operating activities after working-capital changes, versus Rs 341.12 crore a year earlier. It also records net income tax paid of Rs 27.50 crore, compared with Rs 32.78 crore, and net operating cash flow of Rs 165.42 crore. The supplied schedule does not identify additional line items between those displayed amounts that would reconcile the post-working-capital figure to reported net operating cash flow.

Depreciation and amortisation, a non-cash expense added back in the operating reconciliation, increased to Rs 191.16 crore from Rs 174.47 crore. Finance costs rose to Rs 31.28 crore from Rs 27.15 crore, while unrealised foreign-exchange loss fell to Rs 45.43 crore from Rs 178.21 crore. These reconciliations helped lift pre-working-capital operating profit, but did not prevent the reported year-on-year decline in operating cash flow.

How much cash did inventory and receivables absorb at Polyplex?

Polyplex used Rs 345.86 crore for higher inventories and Rs 175.39 crore for higher trade receivables in the half year ended September 30, 2026. Together, these items absorbed Rs 521.25 crore, compared with a Rs 51.96 crore inventory outflow and a Rs 53.12 crore receivables inflow in the prior-year half.

Inventories stood at Rs 2,081.12 crore on September 30, 2026, up from Rs 1,712.01 crore at March 31, 2026. The cash-flow reconciliation also included a Rs 15.29 crore net provision for net realisable value adjustment on inventories, compared with Rs 9.73 crore a year earlier. This provision is a reconciliation item, whereas the increase in inventories is the working-capital cash outflow.

Trade receivables rose to Rs 1,286.52 crore at September 30, 2026 from Rs 1,124.96 crore at March 31, 2026. In the comparable half year, the cash-flow statement had shown a Rs 53.12 crore reduction in receivables, releasing cash rather than using it. Other current and non-current assets used another Rs 13.70 crore in the latest period, while other financial assets used Rs 1.32 crore.

Trade payables partly offset the current-asset build, providing Rs 245.11 crore of cash, compared with Rs 27.69 crore in the prior-year period. Other financial liabilities added Rs 16.21 crore and provisions added Rs 5.09 crore, while other current and non-current liabilities used Rs 7.48 crore. The disclosed movements show that payable growth did not fully offset the combined inventory and receivables outflow.

How did Polyplex fund investment spending during the half year?

Polyplex reported Rs 241.80 crore of net cash used in investing activities in the half year ended September 30, 2026, compared with Rs 178.44 crore in the corresponding 2025 period. The group reported Rs 209.60 crore of financing cash inflow, against a Rs 18.24 crore financing outflow a year earlier, alongside its operating cash flow of Rs 165.42 crore.

Purchases of property, plant and equipment increased to Rs 371.44 crore from Rs 246.06 crore. The group received Rs 21.73 crore from sales of property, plant and equipment, Rs 117.82 crore from sale of long-term investments and Rs 17.32 crore of interest on bank deposits and others. It also spent Rs 43.31 crore purchasing long-term investments and Rs 42.95 crore acquiring a subsidiary, net of cash acquired.

Non-current borrowing proceeds were Rs 264.44 crore, compared with Rs 36 crore in the previous-year half, while repayments were Rs 33.26 crore. Net current-borrowing proceeds were Rs 33.28 crore. Financing outflows included Rs 28.81 crore of interest on borrowings and others, Rs 15.17 crore of dividends paid to non-controlling interests and Rs 3.43 crore of dividends paid to owners of the holding company.

What changed in Polyplex’s cash and borrowing position?

Polyplex ended September 30, 2026 with Rs 654.28 crore of cash and cash equivalents, up from Rs 323.22 crore at March 31, 2026 and Rs 554.35 crore a year earlier. The reported Rs 333.22 crore increase during the half year followed positive operating and financing cash flows that exceeded the net investing outflow.

Non-current borrowings on the consolidated balance sheet increased to Rs 358.37 crore at September 30, 2026 from Rs 158.59 crore at March 31, 2026. Current borrowings increased to Rs 822.21 crore from Rs 758.50 crore over the same six months. These balance-sheet movements align with the financing cash-flow disclosures of new non-current borrowing proceeds and net current borrowing proceeds.

Capital work-in-progress rose to Rs 376.47 crore at September 30, 2026 from Rs 70 crore at March 31, 2026. Property, plant and equipment declined to Rs 4,060.05 crore from Rs 4,194.87 crore, while the cash-flow statement showed Rs 371.44 crore of purchases of such assets. The group reports polymeric films as its single reportable business segment.

The current-period comparison has a disclosed limitation because Polyplex acquired a 51% stake in Polyplex DigiPrint Private Limited, formerly TechNova Printrite Products Private Limited, during the previous quarter. The subsidiary was consolidated from May 1, 2026, and Polyplex said the current figures are not comparable with the quarter and half year ended September 30, 2025 or the quarter ended June 30, 2026.

Conclusion

Polyplex’s half-year results show a reported return to profit before tax of Rs 431.50 crore, but operating cash flow declined to Rs 165.42 crore from Rs 308.34 crore. Inventory and receivables absorbed Rs 521.25 crore, while property, plant and equipment purchases increased by Rs 125.38 crore year on year to Rs 371.44 crore and financing cash flow turned positive.

The next disclosed funding and execution milestone is Polyplex (Thailand) Public Company Limited’s approved investment of about Rs 146 crore in a biaxially oriented polypropylene, or BOPP, film line, with commercial operations expected in the fourth quarter of financial year 2027-28. Polyplex also said the provisional purchase-price allocation for Polyplex DigiPrint Private Limited may change when the valuation exercise is finalised.