Star Paper Mills operating cash flow falls 74% in half-year

Star Paper Mills Limited generated Rs 6.36 crore of net operating cash in the half year ended September 30, 2026, down 74% from Rs 24.71 crore a year earlier, as profit before tax fell to Rs 12.10 crore from Rs 27.14 crore and cash generated from operations declined.

Why did Star Paper Mills’ operating cash flow fall?

Star Paper Mills’ operating cash flow fell because operating profit before working-capital changes declined to Rs 1.60 crore in the half year ended September 30, 2026, from Rs 15.65 crore in the corresponding 2025 period. This Rs 14.05 crore reduction occurred before movements in inventories, receivables, assets and liabilities, and was the largest change in the operating-cash-flow reconciliation.

Working-capital movements added Rs 8.92 crore in the latest half year, compared with an addition of Rs 12.91 crore a year earlier. The company reported a Rs 3.90 crore cash contribution from changes in inventories and biological assets, versus Rs 16.81 crore in the prior-year period. Changes in financial and non-financial assets added Rs 3.66 crore, while changes in trade receivables used Rs 0.30 crore.

Cash generated from operations consequently dropped to Rs 10.53 crore from Rs 28.56 crore before income-tax payments. Tax paid increased to Rs 4.17 crore from Rs 3.85 crore, taking net cash generated from operating activities to Rs 6.36 crore. The cash-flow statement was prepared under the indirect method prescribed by Indian Accounting Standard 7, Statement of Cash Flows.

How did Star Paper Mills’ profitability change in the half year?

Star Paper Mills’ profit before tax declined 55% to Rs 12.10 crore in the half year ended September 30, 2026, from Rs 27.14 crore a year earlier. Revenue from operations fell to Rs 191.61 crore from Rs 205.53 crore, while total income declined to Rs 207.60 crore from Rs 222.94 crore.

Total expenses were broadly unchanged at Rs 195.50 crore, compared with Rs 195.80 crore in the prior-year half. Cost of materials consumed rose to Rs 111.16 crore from Rs 101.67 crore, while the change in inventories of finished goods, stock-in-trade and work-in-progress was a Rs 9.56 crore reduction in expense, compared with a Rs 1.03 crore expense a year earlier.

Profit after tax was Rs 8.77 crore for the six months, down from Rs 25.83 crore in the corresponding period. Earnings per share, or EPS, was Rs 5.62 against Rs 16.55. Star Paper Mills operates in one segment covering paper, paper board and related products, so the filing does not provide segment-level revenue or cash-flow measures.

The September quarter reported a net loss of Rs 2.24 crore, compared with a profit of Rs 13.02 crore in the September 2025 quarter. Quarterly revenue from operations was Rs 88.15 crore, down from Rs 104.37 crore. Other income included an unrealised loss of Rs 2.72 crore on mutual-fund fair valuation in the September 2026 quarter, against an unrealised gain of Rs 1.42 crore in the comparable quarter.

What happened to Star Paper Mills’ cash and balance sheet?

Star Paper Mills ended September 30, 2026 with cash and cash equivalents of Rs 3.44 crore, down from Rs 9.34 crore at the beginning of the half year. The company recorded a net cash decrease of Rs 5.90 crore during the six months, compared with a Rs 2.16 crore decrease in the half year ended September 30, 2025, when it closed with Rs 20.49 crore.

The September 30 balance sheet showed total assets of Rs 848.95 crore, compared with Rs 837.71 crore at March 31, 2026. Total equity increased to Rs 713.21 crore from Rs 708.30 crore, while current liabilities rose to Rs 54.78 crore from Rs 48.07 crore over the same period.

Current investments were Rs 242.61 crore at September 30, 2026, compared with Rs 231.49 crore at March 31, 2026. Inventories declined to Rs 113.07 crore from Rs 116.97 crore, consistent with inventories and biological assets contributing Rs 3.90 crore to operating cash flow during the half year. Capital work-in-progress increased to Rs 13.98 crore from Rs 4.14 crore.

How did Star Paper Mills’ investing and financing cash flows change?

Star Paper Mills used Rs 12.77 crore in investing activities during the latest half year, compared with Rs 26.47 crore used a year earlier. Purchases of property, plant and equipment, including capital work-in-progress and capital advances, were Rs 6.46 crore, more than double the Rs 3.19 crore spent in the prior-year period.

Mutual-fund transactions were substantial on both sides of the latest cash-flow statement. Star Paper Mills sold mutual funds worth Rs 132.47 crore and bought mutual funds worth Rs 132.00 crore, producing a Rs 0.47 crore net inflow before other investing items. Deposits with banks for more than three months, on a net basis, used Rs 7.77 crore, compared with Rs 24.34 lakh in the earlier half year.

Financing activities provided Rs 51.63 lakh in the latest period, whereas they used Rs 40.34 lakh a year earlier. The company reported Rs 1.00 crore in proceeds from short-term borrowings, alongside Rs 36.78 lakh of lease-liability repayments, Rs 10.55 lakh of interest paid and Rs 1.34 lakh of dividend paid.

Conclusion

Star Paper Mills’ first-half cash-flow result reflects a lower profit base and less working-capital support. Net operating cash flow fell by Rs 18.35 crore to Rs 6.36 crore, while profit before tax declined by Rs 15.04 crore to Rs 12.10 crore. Lower revenue and the September-quarter loss were reported alongside cash and cash equivalents falling to Rs 3.44 crore.

The filing does not disclose a forecast, target, capital-spending plan or scheduled future event. The reported measures to watch in the next disclosure are operating profit before working-capital changes, which was Rs 1.60 crore in the latest half year, property and equipment purchases of Rs 6.46 crore, and deposits with banks exceeding three months that used Rs 7.77 crore of cash.