TCPL Packaging Limited operating cash flow falls 36% in H1

TCPL Packaging Limited reported a 36% year-on-year fall in consolidated operating cash inflow to Rs 58.44 crore for the half year ended September 30, 2026, from Rs 91.97 crore, as higher receivables and inventories used Rs 93.39 crore of cash despite increased profit after tax.

Why did TCPL Packaging’s operating cash flow decline in the first half?

TCPL Packaging’s operating cash flow declined because higher working-capital requirements more than offset increased profit and non-cash adjustments. Cash generated from operations fell to Rs 80.25 crore in the half year ended September 30, 2026, from Rs 109.93 crore a year earlier, before income-tax payments of Rs 21.81 crore reduced operating cash inflow to Rs 58.44 crore.

The largest operating-asset movements were a Rs 40.96 crore cash outflow from trade receivables and a Rs 52.43 crore outflow from inventories, together using Rs 93.39 crore. In the half year ended September 30, 2025, those items used Rs 39.32 crore, comprising Rs 14.84 crore for receivables and Rs 24.48 crore for inventories. Trade payables also changed from providing Rs 8.66 crore of cash in the prior period to using Rs 5.54 crore in the latest period.

Did TCPL Packaging’s earnings improve while operating cash fell?

Yes, TCPL Packaging’s consolidated profit after tax increased to Rs 85.31 crore in the half year ended September 30, 2026, from Rs 51.04 crore a year earlier, while net cash from operating activities declined by Rs 33.53 crore. Profit before tax rose to Rs 114.46 crore from Rs 66.04 crore, and revenue from operations increased to Rs 1,053.98 crore from Rs 885.16 crore.

Operating profit before working-capital changes increased by Rs 40.29 crore to Rs 184.26 crore from Rs 143.97 crore. Depreciation and amortisation rose to Rs 46.07 crore from Rs 41.31 crore, while net finance costs included in this cash-flow calculation declined to Rs 27.49 crore from Rs 46.10 crore. The subsequent working-capital movements reduced the cash generated from operations to Rs 80.25 crore.

The revenue increase came alongside higher costs in several lines. Cost of materials consumed rose to Rs 619.70 crore from Rs 516.28 crore, employee-benefit expense increased to Rs 107.18 crore from Rs 92.03 crore, and other expenses reached Rs 164.31 crore from Rs 143.35 crore. Basic earnings per share increased to Rs 93.74 for the half year from Rs 56.09.

How did TCPL Packaging’s working-capital balances change?

TCPL Packaging’s inventories and trade receivables were higher at September 30, 2026 than at March 31, 2026. Inventories rose by Rs 52.43 crore to Rs 295.33 crore, while trade receivables increased by Rs 44.47 crore to Rs 504.50 crore. The cash-flow statement separately recorded Rs 52.43 crore and Rs 40.96 crore cash outflows for inventory and receivable movements, respectively.

Current assets increased to Rs 881.66 crore at September 30 from Rs 792.70 crore at March 31, a rise of Rs 88.96 crore. Other current assets rose to Rs 65.51 crore from Rs 60.04 crore, while current tax assets declined to Rs 2.80 crore from Rs 9.00 crore. Cash and cash equivalents fell to Rs 2.61 crore from Rs 9.31 crore over the same six-month period.

On the liabilities side, trade payables due to creditors other than micro and small enterprises declined to Rs 199.45 crore from Rs 205.59 crore. Other current liabilities increased to Rs 37.93 crore from Rs 22.95 crore, and the cash-flow statement recorded a Rs 14.23 crore cash source from those liabilities, compared with Rs 33.00 crore in the prior-year half. That increase only partly offset cash used by receivables and inventories.

What were TCPL Packaging’s investing and financing cash flows?

TCPL Packaging used Rs 27.83 crore in investing activities in the half year ended September 30, 2026, compared with Rs 62.66 crore in the corresponding prior-year period. The main investing outflow was Rs 28.31 crore for movement in property, plant and equipment on account of fair value, versus Rs 61.66 crore a year earlier. The latest period also included Rs 1.87 crore invested in equity instruments.

Financing activities used Rs 37.30 crore, compared with an outflow of Rs 33.84 crore in the half year ended September 30, 2025. TCPL Packaging received Rs 60.89 crore in long-term borrowings and repaid Rs 45.74 crore, while interest paid was Rs 25.21 crore and dividends paid were Rs 22.75 crore. Net cash and cash equivalents therefore decreased by Rs 6.69 crore during the period, ending at Rs 2.61 crore.

TCPL Packaging’s combined current and non-current borrowings were Rs 591.23 crore at September 30, 2026, compared with Rs 574.67 crore at March 31, 2026. Non-current borrowings were Rs 250.63 crore and current borrowings were Rs 340.60 crore at the half-year date. The board approved the results on November 5, 2026, and the auditors issued an unmodified limited-review report.

Conclusion

TCPL Packaging increased first-half revenue, profit before tax and profit after tax for the half year ended September 30, 2026, but operating cash inflow moved in the opposite direction. Operating profit before working-capital changes rose to Rs 184.26 crore, yet receivables and inventories used Rs 93.39 crore, contributing to net operating cash inflow falling to Rs 58.44 crore.

The unresolved matter for subsequent disclosures is whether the Rs 504.50 crore receivables balance and Rs 295.33 crore inventory balance convert into cash. TCPL Packaging also incorporated wholly owned subsidiary TCPL Energy Materials Limited on September 24, 2026; the company said there were no financial transactions with that subsidiary during the quarter.