Sonal Adhesives reports Rs 1.5224 crore operating cash flow

Sonal Adhesives Limited reported Rs 1.5224 crore of positive net operating cash for the half year ended September 30, 2026, as a Rs 4.6796 crore decline in trade receivables and a Rs 3.2212 crore increase in trade payables partly offset a Rs 7.1951 crore inventory increase.

How did Sonal Adhesives generate operating cash in the half year?

Sonal Adhesives generated Rs 1.5224 crore of operating cash after Rs 23.56 lakh of net income-tax payments in the half year ended September 30, 2026. Cash generated from operations was Rs 1.7579 crore, following operating profit before working-capital changes of Rs 2.2452 crore. Although the cash-flow statement labels the line “net cash used in operating activities”, the displayed amount is positive.

The operating-profit reconciliation included Rs 67.24 lakh of depreciation and Rs 73.08 lakh of finance costs, while Rs 1.49 lakh of interest income reduced the adjustments. Profit before exceptional items and tax was Rs 85.69 lakh for the half year, producing a pre-working-capital operating-profit figure higher than the reported profit before tax after non-cash and financing adjustments.

The reported cash figure contrasts with Rs 7.0136 crore of net cash used in operating activities in the year ended March 31, 2026. These are not like-for-like periods because the earlier figure covers a full year rather than six months, but the reported direction changed from an outflow to a positive amount. Cash generated from operations moved from a negative Rs 6.5129 crore in the year ended March 2026 to a positive Rs 1.7579 crore in the September 2026 half year.

Why did Sonal Adhesives' inventory rise by Rs 7.1951 crore?

Sonal Adhesives’ inventories rose to Rs 22.9532 crore at September 30, 2026, from Rs 15.7581 crore at March 31, 2026. The Rs 7.1951 crore balance-sheet increase corresponds with the Rs 7.1951 crore cash outflow recorded for inventories in the working-capital section. It was the largest adverse movement among the individual working-capital lines disclosed for the half year.

The filing does not state an operational reason for the additional stock. It shows that current assets increased to Rs 36.5588 crore at September 30 from Rs 34.5057 crore at the March year-end, with the inventory increase partly offset by a reduction in current trade receivables.

Current trade receivables fell to Rs 9.3947 crore at September 30, 2026, from Rs 14.2148 crore at March 31, 2026. Non-current trade receivables moved in the other direction, rising to Rs 96.03 lakh from Rs 81.98 lakh. The cash-flow statement reports a Rs 4.6796 crore decrease in trade receivables, providing cash that partly funded the inventory build-up.

Which working-capital movements offset the inventory outflow?

Sonal Adhesives partly offset the inventory outflow through a Rs 4.6796 crore decrease in trade receivables and a Rs 3.2212 crore increase in trade payables. Together, those two cash sources totalled Rs 7.9008 crore, exceeding the Rs 7.1951 crore inventory cash outflow by Rs 70.57 lakh before the other working-capital movements.

Trade payables due to small and micro enterprises increased to Rs 1.3179 crore at September 30, 2026, from Rs 99.47 lakh at March 31, 2026. Payables to other creditors rose to Rs 16.5757 crore from Rs 13.6778 crore. Total trade payables therefore reached Rs 17.8936 crore, compared with Rs 14.6725 crore at the March year-end.

Other current assets used Rs 39.93 lakh of cash in the half year, while other current financial assets provided Rs 1.81 lakh. Other current financial liabilities declined by Rs 74.01 lakh and non-current provisions declined by Rs 7.02 lakh, both representing cash outflows in the statement. Overall working-capital changes were a Rs 48.73 lakh outflow, compared with a Rs 11.024 crore outflow in the year ended March 31, 2026.

How did Sonal Adhesives fund its balance-sheet movements?

Sonal Adhesives’ total assets increased to Rs 50.8554 crore at September 30, 2026, from Rs 49.031 crore at March 31, 2026. Current assets rose by Rs 2.0531 crore, while non-current assets decreased by Rs 22.87 lakh to Rs 14.2966 crore. The inventory increase was the principal increase within current assets, while lower receivables reduced its net effect.

The company reduced short-term borrowings by Rs 91.91 lakh and long-term borrowings by Rs 28.78 lakh during the half year, according to the financing cash-flow statement. Current borrowings stood at Rs 14.688 crore at September 30, compared with Rs 15.6071 crore at March 31, while non-current borrowings were Rs 5.8817 crore, down from Rs 6.1695 crore.

Financing activities used Rs 1.9377 crore, including Rs 73.08 lakh of finance costs. Investing activities generated Rs 37 lakh because Rs 65.78 lakh of deposits matured, exceeding Rs 30.27 lakh of capital expenditure on fixed assets after Rs 1.49 lakh of interest received. Cash and cash equivalents consequently fell by Rs 4.54 lakh to Rs 4.81 lakh from Rs 9.35 lakh at the start of the financial year.

Equity increased to Rs 10.7884 crore at September 30, 2026, from Rs 10.3509 crore at March 31, 2026. Total current liabilities rose to Rs 33.3886 crore from Rs 31.6974 crore, reflecting the increase in trade payables despite the reduction in current borrowings. The statement therefore shows the inventory increase being accommodated alongside lower borrowings and a higher payable balance.

Conclusion

Sonal Adhesives reported positive operating cash of Rs 1.5224 crore in the September 2026 half year despite a Rs 7.1951 crore inventory increase. Lower trade receivables and higher trade payables supplied Rs 7.9008 crore of cash between them, while the total working-capital outflow was limited to Rs 48.73 lakh, compared with Rs 11.024 crore in the year ended March 2026.

The filing does not disclose an inventory target, collections target or cash-flow guidance. Future results will therefore be needed to clarify whether inventory remains near Rs 22.9532 crore, whether trade receivables stay below the March level of Rs 14.2148 crore, and whether trade payables remain around the September balance of Rs 17.8936 crore.