Rose Merc operating cash outflow hits Rs 6.0169 crore

Rose Merc Limited reported a Rs 6.0169 crore consolidated operating cash outflow for the half year ended September 30, 2026, despite Rs 11.8662 crore of consolidated profit after tax, as working-capital and balance-sheet movements absorbed cash. Its board approved the unaudited consolidated results on November 12, 2026.

Why did Rose Merc report an operating cash outflow?

Rose Merc reported an operating cash outflow because its Rs 13.2117 crore operating profit before working-capital changes became Rs 6.9893 crore of cash used in operations after balance-sheet movements, followed by Rs 20.55 lakh of direct taxes paid. Net cash used in operating activities was therefore Rs 6.0169 crore, compared with Rs 3.1622 crore used in the half year ended September 30, 2025.

The largest stated cash absorptions were a Rs 3.6163 crore increase in other financial assets, a Rs 2.2660 crore increase in trade receivables and a Rs 1.4808 crore decrease in short-term provisions. Inventory increased by Rs 70.69 lakh and other non-current assets increased by Rs 1.2291 crore. These uses were partly offset by a Rs 71.30 lakh reduction in other current assets, a Rs 1.0422 crore increase in other non-current liabilities and Rs 29.25 lakh of higher current-tax liabilities.

How did profit and cash flow differ at Rose Merc?

Rose Merc’s reported profit rose while operating cash flow remained negative: consolidated profit after tax was Rs 11.8662 crore for the six months to September 2026, against Rs 9.8286 crore a year earlier, while the operating cash outflow increased from Rs 3.1622 crore to Rs 6.0169 crore. The cash-flow statement records balance-sheet movements separately from the income statement’s reported profit.

Profit before tax was Rs 12.0606 crore, after Rs 29.17 lakh of depreciation and amortisation, Rs 3.83 lakh of finance costs, Rs 17.66 lakh of interest income and a Rs 99.77 lakh foreign-exchange movement. Current tax expense was Rs 20.55 lakh and the deferred-tax benefit was Rs 1.10 lakh, resulting in total profit after other comprehensive income of Rs 11.8662 crore. The statement showed no other comprehensive income in either half-year period.

Revenue from operations reached Rs 57.1498 crore in the September 2026 half year, compared with Rs 39.4790 crore in the comparable 2025 period. Total expenses increased to Rs 45.7261 crore from Rs 29.7486 crore, while profit before tax rose by Rs 2.1697 crore. Rose Merc disclosed one reportable business segment, so the filing provides no segment-level split of revenue, profit or cash flow.

Which balance-sheet items changed during the half year?

Rose Merc’s total assets rose to Rs 107.4693 crore at September 30, 2026 from Rs 96.4160 crore at March 31, 2026. Current trade receivables increased to Rs 16.6664 crore from Rs 14.4004 crore, matching the Rs 2.2660 crore working-capital cash use reported in the consolidated cash-flow statement.

Inventories rose to Rs 11.2265 crore from Rs 10.5196 crore, while other current assets declined to Rs 17.1940 crore from Rs 17.9070 crore. Other financial assets were Rs 3.6163 crore at September 30, while no balance was shown under that line at March 31. Short-term loans and advances rose to Rs 92.56 lakh from Rs 27.06 lakh.

Property, plant and equipment increased by Rs 2.0367 crore, while goodwill increased by Rs 68.63 lakh. The cash-flow statement reported Rs 3.6625 crore used in investing activities, compared with Rs 2.8615 crore used in the prior-year half, including Rs 2.3284 crore spent on fixed assets and Rs 65.50 lakh of changes in short-term loans and advances.

How was Rose Merc funded during the period?

Rose Merc received Rs 12.0503 crore from the issue of warrants and share capital during the half year ended September 30, 2026, but financing activities used Rs 2.0200 crore overall. The financing cash flow included a Rs 12.1605 crore net movement in shareholders’ current account, a Rs 1.9810 crore decrease in long-term borrowings and Rs 3.83 lakh of finance costs, partly offset by Rs 10.94 lakh of additional short-term borrowings.

Equity share capital was Rs 7.8860 crore at September 30, up from Rs 5.9476 crore at March 31. Money against share warrants declined to Rs 1.8845 crore from Rs 2.8851 crore. Other equity rose to Rs 47.5846 crore from Rs 44.4274 crore, while non-controlling interest, or NCI, increased to Rs 42.5067 crore from Rs 33.8536 crore.

Long-term borrowings fell to Rs 11.39 lakh from Rs 2.0949 crore over the six months, while short-term borrowings increased to Rs 35.19 lakh from Rs 24.25 lakh. Cash and cash equivalents ended at Rs 8.0035 crore, up Rs 33.43 lakh from Rs 7.6692 crore at the start of the financial year, after the Rs 6.0169 crore operating outflow, Rs 3.6625 crore investing outflow and Rs 2.0200 crore financing outflow.

What do the half-year statements show about cash use?

Rose Merc’s statements show that reported profit did not translate into operating cash during the six months to September 2026 because receivables, other financial assets, non-current assets, inventory and short-term provisions absorbed cash. Cash nevertheless increased by Rs 33.43 lakh, with Rs 12.0503 crore of proceeds from warrants and share capital among the period’s financing inflows.

The cash balance comprised Rs 7.4440 crore of cash on hand and Rs 55.95 lakh of balances in current bank accounts at September 30, 2026. The company’s statutory auditor issued a limited-review conclusion on the unaudited consolidated results, stating that nothing had come to its attention to indicate a material misstatement under the applicable reporting requirements.

Conclusion

The half-year statements combine higher revenue, higher profit and a larger operating cash deficit than in the prior-year period. Receivables rose by Rs 2.2660 crore, inventory by Rs 70.69 lakh and other financial assets reached Rs 3.6163 crore, while investing activity used Rs 3.6625 crore and long-term borrowings were reduced by Rs 1.9810 crore.

What to watch next is whether trade receivables of Rs 16.6664 crore, inventories of Rs 11.2265 crore, short-term loans and advances of Rs 92.56 lakh and other financial assets of Rs 3.6163 crore reverse or continue to use cash. The November 12, 2026 filing gave no management cash-flow target or forward guidance, leaving subsequent financial disclosures to show whether operating cash flow changes direction.