Rex Pipes profit rises 84% as operating cash flow turns negative

Rex Pipes and Cables Industries Limited reported unaudited standalone profit of Rs 3.61 crore for the half year ended September 30, 2026, up 84% year on year, while revenue from operations fell to Rs 60.12 crore and operating activities used Rs 6.41 crore of cash.

Why did Rex Pipes' profit rise despite lower revenue?

Rex Pipes' profit rose because total expenses declined more than revenue, while other income supported total income. Revenue from operations fell by Rs 57.03 lakh to Rs 60.12 crore in the half year ended September 30, 2026, from Rs 60.69 crore in the corresponding half year ended September 30, 2025. Total income was nevertheless almost unchanged at Rs 61.13 crore, supported by Rs 1.01 crore of other income in the latest period.

Total expenses declined by Rs 2.70 crore to Rs 56.61 crore from Rs 58.31 crore a year earlier. Material consumption decreased by Rs 2.36 crore to Rs 41.23 crore, purchases of stock-in-trade fell by Rs 33.77 lakh to Rs 8.72 crore, and finance costs reduced by Rs 23.74 lakh to Rs 1.14 crore. Employee-benefit expense increased by Rs 3.01 lakh to Rs 1.23 crore, but profit before tax increased to Rs 4.52 crore from Rs 2.82 crore.

How did Rex Pipes' tax charge and earnings per share change?

Rex Pipes' total tax expense rose by Rs 5.77 lakh to Rs 91.25 lakh for the half year ended September 30, 2026, from Rs 85.48 lakh a year earlier. Current tax was Rs 1.15 crore, partly offset by a Rs 13.46 lakh credit relating to earlier years and a Rs 10.44 lakh deferred-tax credit. The Rs 1.70 crore increase in profit before tax therefore translated into a Rs 1.65 crore increase in period profit.

Basic and diluted earnings per share were Rs 3.82 in the latest half year, compared with Rs 2.08 in the corresponding prior-year period. The financial statement says the half-year earnings per share figure is not annualised and is based on equity shares with a face value of Rs 10 each. Rex Pipes reported no exceptional items, extraordinary items or discontinued operations in either half-year period.

Why did Rex Pipes report negative operating cash flow?

Rex Pipes reported negative operating cash flow because working-capital movements exceeded its operating profit before those changes. Net cash used in operating activities was Rs 6.41 crore in the half year ended September 30, 2026, compared with net cash generated from operating activities of Rs 4.37 crore in the year ended March 31, 2026. The company prepared the cash-flow statement using the indirect method prescribed under Accounting Standard 3.

Short-term loans and advances increased by Rs 4.77 crore and trade receivables increased by Rs 4.27 crore during the latest half year. Inventories rose by Rs 67.18 lakh and other current assets rose by Rs 1.10 crore, while trade payables increased by Rs 2.06 crore. Other liabilities decreased by Rs 2.56 crore, leaving cash generated from operations at a negative Rs 5.39 crore before Rs 1.02 crore of net income taxes paid.

The latest cash result contrasts with the full year ended March 31, 2026, when Rex Pipes generated Rs 6.26 crore of cash from operations before tax payments of Rs 1.89 crore. Profit before tax was Rs 4.52 crore in the September 2026 half year, but cash conversion was affected by receivables, advances, inventory and other working-capital balances. This difference shows that the higher reported profit was not matched by positive operating cash flow in the same period.

How did Rex Pipes fund its cash requirements?

Rex Pipes funded its operating and investing cash needs through borrowings, reporting Rs 7.02 crore of net cash from financing activities in the September 2026 half year. Net proceeds from long-term borrowings were Rs 2.78 crore and net proceeds from short-term borrowings were Rs 5.37 crore. Interest paid was Rs 1.14 crore, matching the finance cost recorded in the half-year profit and loss statement.

Cash and cash equivalents increased by Rs 2.88 lakh to Rs 1.17 crore at September 30, 2026, from Rs 1.14 crore at March 31, 2026. Investing activities included Rs 1.41 crore spent on fixed assets, Rs 64.29 lakh invested in non-current investments, Rs 1.32 crore released from other non-current assets and Rs 15.09 lakh of interest income received. These movements left financing inflows largely absorbed by operating and investment requirements.

What changed in Rex Pipes' balance sheet?

Rex Pipes' balance sheet total increased to Rs 92.94 crore at September 30, 2026, from Rs 81.86 crore at March 31, 2026. Share capital remained Rs 9.45 crore, while reserves and surplus rose to Rs 35.35 crore from Rs 31.74 crore. Property, plant and equipment increased to Rs 10.33 crore from Rs 9.55 crore, while non-current investments rose to Rs 7.70 crore from Rs 7.06 crore.

Working-capital balances expanded alongside the cash-flow movements. Trade receivables rose to Rs 38.42 crore from Rs 34.14 crore, inventories reached Rs 21.23 crore from Rs 20.55 crore, and short-term loans and advances increased to Rs 7.59 crore from Rs 2.81 crore. Short-term borrowings increased to Rs 34.34 crore from Rs 28.97 crore, while long-term borrowings stood at Rs 2.94 crore at September 30, 2026.

Conclusion

Rex Pipes delivered higher September 2026 half-year profit despite a marginal decline in revenue because expenses fell by Rs 2.70 crore and total income held at Rs 61.13 crore. However, the Rs 3.61 crore profit coincided with a Rs 6.41 crore operating cash outflow as receivables, advances, inventories and other working-capital changes consumed cash.

The next disclosures to watch are changes in cash conversion, receivables, advances and borrowing balances after the September 2026 position. Rex Pipes also told the exchange that its board received an update on the fire incident at its factory premises on October 3, 2026, leaving further company disclosures on that matter relevant.