Scarnose reports Rs 9.6509 crore inventory after receivables fall

Scarnose International Limited reported Rs 9.6509 crore of inventories at September 30, 2026, while its cash-flow statement recorded a Rs 9.5854 crore decrease in receivables during the half year. The near-matching movements changed Scarnose's current-asset mix, while net cash used in operating activities was Rs 2.63 lakh.

What changed in Scarnose's working capital at September 30?

Scarnose shifted its reported current-asset composition from trade receivables to inventories during the half year ended September 30, 2026. The September 30 balance sheet shows inventories of Rs 9.6509 crore and does not show an amount for trade receivables, whereas the March 31, 2026 comparative balance sheet showed trade receivables of Rs 9.5854 crore and did not show an inventory amount. The cash-flow statement separately classifies the movements as a Rs 9.5854 crore decrease in receivables and a Rs 9.6509 crore increase in inventories.

The filing does not state that collections from receivables were directly used to acquire inventory. However, the two amounts were close: the inventory increase exceeded the receivables decrease by Rs 6.55 lakh. This meant that a large reduction in one current-asset line was substantially offset by the creation of another, before considering movements in payables, cash and other assets.

Scarnose's total assets increased by Rs 3.46 lakh to Rs 9.8146 crore at September 30 from Rs 9.78 crore at March 31. That limited net increase contrasts with the scale of the Rs 9.5854 crore receivables movement and Rs 9.6509 crore inventory balance. The figures indicate a change in the composition of assets rather than a similarly sized expansion in the total balance sheet.

How did the inventory increase affect Scarnose's operating cash flow?

The inventory increase largely offset the cash-flow benefit from lower receivables, producing a Rs 6.32 lakh net working-capital outflow for Scarnose in the September 2026 half year. The cash-flow statement records a Rs 9.5854 crore inflow from the decrease in receivables, a Rs 9.6509 crore outflow from the increase in inventories, and a Rs 23,000 inflow from increased payables. Operating profit before working-capital changes was Rs 1.67 lakh.

Scarnose reported cash generated from operations of negative Rs 4.65 lakh, followed by cash flow before extraordinary items at the same negative Rs 4.65 lakh. The statement then records Rs 2.02 lakh of proceeds from extraordinary items, resulting in net cash used in operating activities of Rs 2.63 lakh. The reported operating cash outflow was therefore measured in lakh, despite the much larger gross shifts within receivables and inventories.

The comparable half year ended September 30, 2025 reported net cash used in operating activities of Rs 7.6046 crore. In that earlier period, the cash-flow statement showed a Rs 7.6781 crore increase in receivables, which was a cash outflow, and total working-capital adjustments of negative Rs 7.7053 crore. The receivables line therefore reversed direction in the 2026 half year, but the inventory build-up absorbed most of its cash-flow effect.

What happened to Scarnose's cash and other balance-sheet lines?

Scarnose's cash and cash equivalents declined by Rs 3.20 lakh to Rs 3.50 lakh at September 30, 2026 from Rs 6.70 lakh at March 31, 2026. The cash-flow statement reports a net decrease in cash and cash equivalents of Rs 3.19 lakh during the period. The Rs 1,000 financing cash outflow and Rs 56,000 investing cash outflow were small relative to the movement in operating cash flow.

Other current assets rose to Rs 3.75 lakh from Rs 3.20 lakh, while property, plant and equipment declined to Rs 2.85 lakh from Rs 3.32 lakh. Non-current investments remained Rs 6.05 lakh at both reporting dates, and other non-current assets remained Rs 20,000. These lines were considerably smaller than the inventory and receivables movements recorded during the half year.

Scarnose reported trade payables, excluding micro and small enterprises, of Rs 3.75 lakh at September 30, compared with Rs 1.53 lakh at March 31. Other current liabilities increased to Rs 68,000 from Rs 47,000, while short-term provisions fell to Rs 1.91 lakh from Rs 3.26 lakh. The balance sheet does not show short-term or long-term borrowings for either date, and the cash-flow statement records no borrowing proceeds in the September 2026 half year.

Was Scarnose profitable in the September 2026 half year?

Scarnose reported profit before tax of Rs 3.22 lakh for the half year ended September 30, 2026, down from Rs 10.81 lakh in the half year ended September 30, 2025. The pre-tax result declined by Rs 7.59 lakh year on year. The company reported one operating segment, Animal Food Products, and stated that there were no reportable segments under Accounting Standard 17, Segment Reporting.

The September 2026 statement recorded employee-benefit expense of Rs 2.84 lakh, depreciation and amortisation expense of Rs 46,000, finance cost of Rs 1,000 and other expenses of Rs 6.03 lakh. It also recorded a current-tax figure of negative Rs 85,000 and deferred-tax figure of negative Rs 8,000. The filing states that there was no adjustment in the profit and loss account for the half year in financial year 2026-27.

Share capital remained Rs 3.1502 crore at both September 30 and March 31, while reserves and surplus increased to Rs 6.5985 crore from Rs 6.5755 crore. Deferred-tax liabilities rose to Rs 26,000 from Rs 18,000. Scarnose said its audit committee reviewed the results and its board approved them on November 2, 2026; the independent reviewer reported that nothing had come to its attention indicating a material misstatement in the unaudited results.

Conclusion

Scarnose's September half-year filing shows a substantial working-capital reconfiguration: a Rs 9.5854 crore reduction in receivables was accompanied by Rs 9.6509 crore of inventory. The movements broadly offset each other, leaving a Rs 6.32 lakh net working-capital outflow and net operating cash used of Rs 2.63 lakh, while profit before tax declined to Rs 3.22 lakh from Rs 10.81 lakh a year earlier.

The filing does not explain the reason for the receivables reduction or the inventory increase, making the evolution of those two lines an unresolved matter for subsequent disclosures. The next financial filing can show whether Scarnose reduces its Rs 9.6509 crore inventory position, rebuilds receivables, or maintains this asset mix, alongside changes in the Rs 3.50 lakh cash balance and operating cash flow.