Sheetal Universal H1 profit rises but cash outflow widens

Sheetal Universal Limited reported consolidated profit of Rs 6.65 crore for the half year ended September 30, 2026, compared with Rs 1.52 crore a year earlier, while operating activities used Rs 7.83 crore as inventories increased by Rs 17.27 crore. Financing inflows of Rs 12.73 crore lifted period-end cash and cash equivalents to Rs 1.78 crore.

How did Sheetal Universal’s H1 earnings change?

Sheetal Universal’s consolidated revenue from operations rose to Rs 124.42 crore in the half year ended September 30, 2026, from Rs 48.08 crore in the corresponding half year ended September 30, 2025. Total income increased to Rs 125.39 crore from Rs 48.31 crore, while profit before tax rose to Rs 8.85 crore from Rs 2.04 crore.

Profit for the period increased to Rs 6.65 crore from Rs 1.52 crore. Basic and diluted earnings per equity share were Rs 5.55, compared with Rs 1.27 in the prior-year half. Current tax was Rs 2.26 crore in H1 2026, while deferred tax was a credit of Rs 6.37 lakh.

The income statement recorded cost of materials consumed of Rs 127.42 crore, compared with Rs 43.80 crore in H1 2025. It also included a negative Rs 16.92 crore change in inventories of finished goods, work-in-progress and stock-in-trade, against a negative Rs 3.22 crore in the prior-year half, reducing expenses under the accounting presentation.

Why was Sheetal Universal’s operating cash flow negative?

Sheetal Universal reported net cash used in operating activities of Rs 7.83 crore in H1 2026, compared with an outflow of Rs 2.25 crore in H1 2025. Operating profit before working-capital changes increased to Rs 11.87 crore from Rs 4.51 crore, but movements in operating assets and liabilities exceeded that pre-working-capital amount.

The largest working-capital cash use was a Rs 17.27 crore increase in inventories, compared with a Rs 2.21 crore increase in H1 2025. Trade receivables increased by Rs 1.96 crore in H1 2026, while the provision-related adjustment used Rs 2.31 crore. These cash-flow movements are separate from the negative Rs 16.92 crore inventory-change line shown in the profit and loss statement.

An increase in payables provided Rs 4.11 crore of cash, partly offsetting the inventory and receivables movements. In the corresponding 2025 half, payables had provided Rs 8.87 crore. Cash generated from operations was therefore negative Rs 5.57 crore in H1 2026, versus negative Rs 1.88 crore a year earlier, and an income-tax adjustment of Rs 2.26 crore took the final operating cash outflow to Rs 7.83 crore.

What changed in Sheetal Universal’s working capital and balance sheet?

Sheetal Universal’s consolidated inventory balance stood at Rs 64.86 crore on September 30, 2026, up from Rs 47.59 crore on March 31, 2026. Trade receivables rose to Rs 43.82 crore from Rs 41.86 crore, while other current assets increased to Rs 15.90 crore from Rs 5.09 crore during the same six-month period.

Cash and cash equivalents were Rs 1.78 crore at September 30, 2026, compared with Rs 14.89 lakh at March 31, 2026. The cash-flow statement reported Rs 3.28 crore used in investing activities and Rs 7.83 crore used in operating activities, offset by Rs 12.73 crore generated from financing activities.

Long-term borrowings rose to Rs 9.80 crore at September 30, 2026 from Rs 5.33 crore at March 31, 2026. Short-term borrowings declined to Rs 31.84 crore from Rs 32.79 crore, while trade payables other than micro and small enterprises fell to Rs 15.88 crore from Rs 23.89 crore.

How did financing support Sheetal Universal’s cash balance?

Sheetal Universal recorded Rs 12.73 crore of net cash from financing activities in H1 2026, compared with Rs 1.65 crore in H1 2025. The 2026 financing cash flow included Rs 10.36 crore shown as proceeds from reserve and surplus and premium, Rs 4.48 crore from long-term borrowings and Rs 52 lakh from issuance of share capital.

The financing statement also recorded a Rs 94.60 lakh outflow in the short-term-borrowing line and Rs 1.68 crore of interest paid. These listed financing movements reconciled with the increase in long-term borrowings to Rs 9.80 crore and the reduction in short-term borrowings to Rs 31.84 crore at September 30, 2026.

A separate certificate stated that Sheetal Universal had received Rs 25.45 crore from a preferential issue of 14.20 lakh convertible warrants by September 30, 2026. Of the amount received, Rs 20.33 crore was used for working-capital requirements and Rs 5.12 crore for general corporate purposes, with the certificate stating that there had been no deviation or variation in utilisation during the half year.

What do the filing’s other disclosures show?

Sheetal Universal reported one business segment and therefore made no segment-level disclosure under Accounting Standard 17, which covers segment reporting. The consolidated accounts include three subsidiaries: Saumesvar International Pvt Ltd, Svar Industries Pvt Ltd and Helios Global LLC.

The board approved the results on November 5, 2026, and Sunit M Chhatbar & Co performed a limited review. The reviewer stated that nothing had come to its attention suggesting a required disclosure failure or material misstatement, while noting that a review provides less assurance than an audit and that no audit opinion was expressed.

The preferential-issue certificate showed an original allocation of Rs 29.82 crore, of which Rs 25.45 crore had been received and utilised by September 30, 2026. The remaining Rs 4.38 crore included Rs 1.70 crore allocated to machinery and Rs 2.68 crore remaining under the working-capital allocation.

Conclusion

Sheetal Universal’s H1 2026 filing shows reported revenue rising by Rs 76.34 crore year on year and profit rising by Rs 5.13 crore, but not converting into operating cash. The Rs 17.27 crore inventory build, alongside a Rs 1.96 crore increase in receivables, contributed to the operating cash outflow even as financing inflows increased cash at the reporting date.

The next filing will show whether the Rs 64.86 crore inventory and Rs 43.82 crore receivables balances translate into cash. It will also show progress in applying the Rs 4.38 crore remaining under the preferential-issue allocation, including Rs 1.70 crore intended for machinery and Rs 2.68 crore for working capital.