Sanrhea Technical Textiles posts Rs 6.67 crore operating outflow

Sanrhea Technical Textiles Limited recorded a Rs 6.67 crore net cash outflow from operating activities in the half year ended September 30, 2026, compared with Rs 2.80 crore generated a year earlier, although net profit rose to Rs 4.17 crore. Working-capital changes absorbed Rs 4.67 crore and net direct taxes paid were Rs 2.00 crore.

Why did Sanrhea Technical Textiles report an operating cash outflow?

Sanrhea Technical Textiles reported an operating cash outflow because cash generated before working-capital changes did not cover the subsequent Rs 4.67 crore working-capital absorption and Rs 2.00 crore of net direct taxes paid. Cash generated before working-capital changes increased to Rs 7.24 crore for the half year ended September 30, 2026, from Rs 4.01 crore in the corresponding 2025 period.

Profit before tax rose to Rs 5.59 crore from Rs 2.37 crore a year earlier, while net profit increased to Rs 4.17 crore from Rs 1.78 crore. However, cash generated from operating activities before taxes turned negative at Rs 4.67 crore, compared with positive Rs 3.63 crore in the prior-year half, producing the reversal in net operating cash flow.

The disclosed adjustments included depreciation and amortisation expense of Rs 1.02 crore, expected-credit-loss provision of Rs 25.93 lakh and interest expense of Rs 40.56 lakh in the 2026 half year. These non-cash and financing-related adjustments helped lift cash generated before working-capital changes above the Rs 5.59 crore profit-before-tax figure, but did not prevent the later outflow.

Which working-capital items used Sanrhea Technical Textiles' cash?

Sanrhea Technical Textiles' largest disclosed working-capital cash use was a Rs 5.64 crore increase in other current assets during the six months ended September 30, 2026. Inventories absorbed Rs 4.39 crore and trade receivables absorbed Rs 2.38 crore, together exceeding the Rs 7.24 crore generated before working-capital changes.

The balance sheet records other current assets at Rs 9.90 crore on September 30, 2026, up from Rs 4.27 crore at March 31, 2026. Inventories increased to Rs 17.53 crore from Rs 13.13 crore, and trade receivables rose to Rs 14.00 crore from Rs 11.87 crore over the same dates.

Other movements partly offset those asset increases. Other current liabilities added Rs 28.75 lakh, other current financial liabilities added Rs 13.19 lakh, and trade and other payables added Rs 22.43 lakh in the cash-flow statement. Current provisions used Rs 21.28 lakh, while non-current provisions added Rs 14.39 lakh, leaving the overall working-capital movement at a Rs 4.67 crore cash use.

The asset expansion was not confined to working capital. Total current assets rose to Rs 43.39 crore at September 30 from Rs 33.73 crore at March 31, while total assets increased to Rs 55.23 crore from Rs 44.51 crore. The filing does not provide a separate explanation for the composition or intended use of the increase in other current assets.

How did Sanrhea Technical Textiles finance its cash requirements?

Sanrhea Technical Textiles generated Rs 5.14 crore from financing activities in the half year ended September 30, 2026, compared with Rs 98.02 lakh in the prior-year half. Net proceeds from current borrowings were Rs 6.71 crore, while proceeds from non-current borrowings were Rs 25.50 lakh.

Those inflows were reduced by Rs 56.65 lakh of non-current borrowing repayments, Rs 85.35 lakh of dividend payments and Rs 40.42 lakh of interest paid. The financing cash flow therefore did not fully cover the combined Rs 6.67 crore operating outflow and Rs 1.79 crore investing outflow.

Current borrowings increased to Rs 7.15 crore at September 30, 2026 from Rs 1.01 crore at March 31, 2026. Non-current borrowings increased to Rs 3.25 crore from Rs 2.99 crore, and total current liabilities rose to Rs 13.80 crore from Rs 6.80 crore during the same six-month period.

Total equity increased to Rs 37.02 crore at September 30 from Rs 33.71 crore at March 31. The increase included other equity of Rs 31.33 crore, compared with Rs 28.02 crore at the preceding year-end, while equity share capital remained Rs 5.69 crore.

What happened to Sanrhea Technical Textiles' cash and investment spending?

Sanrhea Technical Textiles ended September 30, 2026 with cash and cash equivalents of Rs 47.81 lakh, down from Rs 3.79 crore at the start of the half year. The reported net decrease in cash and cash equivalents was Rs 3.31 crore after the operating, investing and financing cash flows.

Net cash used in investing activities was Rs 1.79 crore, compared with Rs 16.41 lakh used in the half year ended September 30, 2025. Capital expenditure, including payments for property, plant and equipment, capital advances and intangible assets under development, was Rs 1.84 crore, up from Rs 18.58 lakh a year earlier.

The company received Rs 3.50 lakh from the sale of property, plant and equipment, Rs 1.90 lakh in interest and Rs 21,000 in dividends. Margin-money fixed deposits used Rs 50,000, according to the investing cash-flow statement. Property, plant and equipment stood at Rs 9.88 crore at September 30, compared with Rs 9.71 crore at March 31.

Bank balances other than cash and cash equivalents rose to Rs 1.27 crore from Rs 41.38 lakh. These balances are separately presented from cash and cash equivalents, which closed at Rs 47.81 lakh in the cash-flow statement.

Did Sanrhea Technical Textiles remain profitable in the first half?

Sanrhea Technical Textiles remained profitable in the half year ended September 30, 2026, with net profit of Rs 4.17 crore against Rs 1.78 crore in the previous-year half. Revenue from operations increased to Rs 51.81 crore from Rs 36.14 crore, while profit before tax increased to Rs 5.59 crore from Rs 2.37 crore.

Total income rose to Rs 51.85 crore from Rs 36.17 crore, and total expenses increased to Rs 46.26 crore from Rs 33.80 crore. The filing identifies Industrial Fabric as the company's sole segment and states that segment reporting under Indian Accounting Standard 108, or Ind AS 108, is not applicable.

The board approved the unaudited quarterly and half-year results on November 6, 2026. Kantilal Patel & Co., the independent reviewer, said nothing had come to its attention suggesting the statement failed to disclose required information or contained a material misstatement.

Conclusion

Sanrhea Technical Textiles' first-half figures show a divergence between profit and operating cash flow: net profit rose to Rs 4.17 crore, but operating cash flow moved from a Rs 2.80 crore inflow a year earlier to a Rs 6.67 crore outflow. Increases in other current assets, inventories and receivables were the principal disclosed cash uses, alongside Rs 2.00 crore of net taxes paid.

The next reported results will indicate whether the September 2026 current-asset base of Rs 43.39 crore begins to convert into cash and whether current borrowings remain elevated after reaching Rs 7.15 crore. The filing provides no working-capital target, cash-flow forecast or specific reduction plan, leaving cash conversion as the disclosed unresolved matter to watch next.