SMR Jewels H1 profit rises 57% despite a 7% revenue fall

SMR Jewels Limited reported net profit of Rs 16.74 crore for the half year ended 30 September 2026, up 57% from Rs 10.67 crore a year earlier, despite revenue falling 7% to Rs 184.98 crore. Higher inventory and trade receivables contributed to a Rs 45.06 crore operating cash outflow during the period.

Why did SMR Jewels’ H1 profit rise despite lower revenue?

SMR Jewels increased profit because its total expenses declined more than revenue. Revenue from operations fell to Rs 184.98 crore in the half year ended 30 September 2026 from Rs 198.89 crore in the half year ended 30 September 2025, while total expenses declined to Rs 163.35 crore from Rs 184.58 crore. Profit before tax consequently increased to Rs 21.56 crore from Rs 14.31 crore.

The largest movement in the expense base was the change in inventories of finished goods and work in progress, reported as negative Rs 40.39 crore in H1 2026 versus negative Rs 13.75 crore in H1 2025. Cost of materials consumed fell to Rs 178.37 crore from Rs 193.45 crore, while purchases of stock in trade increased to Rs 22.50 crore from Rs 2.63 crore. The lower overall expense total was larger than the Rs 13.91 crore reduction in revenue.

How did SMR Jewels’ profitability and costs change?

SMR Jewels’ reported profit before tax represented about 11.7% of revenue in H1 2026, compared with about 7.2% in H1 2025, based on the reported figures. Net profit represented about 9.0% of revenue, compared with about 5.4% a year earlier. These calculated changes followed an approximately 11.5% fall in total expenses against a 7.0% fall in revenue.

Some cost lines increased even as total expenses declined. Finance cost rose to Rs 96.27 lakh from Rs 83.32 lakh, employee-benefit expense increased to Rs 56.94 lakh from Rs 52.90 lakh, and other expenses reached Rs 1.31 crore from Rs 86.24 lakh. Tax expense increased to Rs 4.83 crore from Rs 3.63 crore alongside the higher pre-tax profit.

Earnings per share were Rs 9.70 for H1 2026, against Rs 6.19 in H1 2025, with both figures adjusted for the bonus issue as stated in the results. Paid-up equity share capital was Rs 18.65 crore at 30 September 2026, compared with Rs 14.65 crore in the preceding half-year column. The company calculates earnings per share using weighted-average share capital.

Why did SMR Jewels report negative operating cash flow?

SMR Jewels reported net cash used in operating activities of Rs 45.06 crore for the period ended 30 September 2026. The cash-flow statement shows a negative Rs 67.39 crore movement from working-capital changes, which outweighed the Rs 21.56 crore profit before tax and the adjustments recorded under the indirect cash-flow method.

Trade receivables were the largest stated cash use, increasing by Rs 45.56 crore, while inventory increased by Rs 38.33 crore. Short-term loans and advances absorbed Rs 3.05 crore and other current assets absorbed Rs 1.20 crore. Higher trade payables of Rs 21.71 crore and a Rs 37.24 lakh increase in short-term provisions only partly offset those cash requirements.

Cash generated from operations was negative Rs 44.83 crore before income-tax payments, and income tax paid was Rs 22.73 lakh. The resulting operating outflow was larger than the Rs 16.50 crore outflow shown for the year ended 31 March 2026 in the cash-flow statement. SMR Jewels uses the indirect method, which starts with profit before tax and adjusts for non-cash items and movements in operating assets and liabilities.

What changed in SMR Jewels’ working-capital balances?

SMR Jewels’ inventory rose to Rs 93.90 crore at 30 September 2026 from Rs 55.57 crore at 31 March 2026. Trade receivables rose to Rs 68.03 crore from Rs 21.47 crore over the same dates. Together, these two balances increased by Rs 84.89 crore, consistent with the substantial working-capital cash absorption reported for the half year.

Total current assets increased to Rs 181.68 crore from Rs 84.69 crore, while total assets rose to Rs 182.60 crore from Rs 85.66 crore. Short-term loans and advances increased to Rs 10.62 crore from Rs 7.57 crore. The balance sheet separately reports cash and cash equivalents of Rs 1.19 crore at 30 September 2026.

How did SMR Jewels fund its cash requirements?

SMR Jewels recorded financing cash inflow of Rs 52.29 crore in the period ended 30 September 2026, compared with Rs 6.61 crore shown for the year ended 31 March 2026. The financing cash flow included Rs 49.26 crore of proceeds from issue of share capital and a Rs 10.00 crore increase in short-term borrowings. These inflows were reduced by a Rs 6.01 crore decrease in long-term borrowings and Rs 96.27 lakh of finance cost.

SMR Jewels allotted 49.80 lakh equity shares on 4 June 2026 and listed them on the exchange on 8 June 2026. Its initial public offering included a Rs 51.20 crore fresh issue and a Rs 12.54 crore offer for sale. The company stated that net proceeds from the fresh issue were Rs 47.92 crore after Rs 3.28 crore of offer expenses borne by the company.

Equity and reserves rose to Rs 115.51 crore at 30 September 2026 from Rs 49.51 crore at 31 March 2026. Long-term borrowings fell to Rs 4.34 crore from Rs 10.36 crore, while current liabilities increased to Rs 62.65 crore from Rs 25.52 crore. The company is engaged in manufacturing, trading and job work of jewellery and related accessories through wholesale and retail outlets, and reports one business segment.

Conclusion

SMR Jewels produced higher H1 profit despite lower revenue because its total expenses fell by Rs 21.23 crore year on year, lifting net profit to Rs 16.74 crore. However, the increase in inventory and receivables absorbed cash, leaving operating activities with a Rs 45.06 crore outflow despite the reported pre-tax profit of Rs 21.56 crore.

The next financial update can show whether inventory of Rs 93.90 crore and trade receivables of Rs 68.03 crore convert into cash and alter the operating cash-flow trend. SMR Jewels also disclosed one investor complaint received on 14 September 2026 that was shown as unresolved at 30 September 2026 and described as awaiting second-level review.