Thangamayil Jewellery inventory rises Rs 744 crore as borrowings rise

Thangamayil Jewellery Limited increased inventory by Rs 744.13 crore to Rs 3,697.76 crore at September 30, 2026, while six-month operating cash flow was an outflow of Rs 542.04 crore and current borrowings rose Rs 591.82 crore. The balance-sheet and cash-flow movements occurred alongside Rs 569.49 crore of net financing inflows.

How much did Thangamayil Jewellery’s inventory increase?

Thangamayil Jewellery’s inventory increased by Rs 744.13 crore, or about 25%, from Rs 2,953.63 crore on March 31, 2026 to Rs 3,697.76 crore on September 30, 2026. Inventory was the company’s largest current asset at the September reporting date, representing most of total current assets of Rs 4,256.21 crore.

The balance-sheet increase is closely aligned with the cash-flow statement, which records a Rs 744.12 crore cash outflow from the increase in inventories during the six months ended September 30, 2026. In the corresponding six months ended September 30, 2025, the inventory-related cash outflow was lower at Rs 637.94 crore.

The Rs 765.86 crore rise in total current assets was largely accounted for by inventory. Trade receivables declined to Rs 6.00 crore from Rs 23.86 crore, while bank balances other than cash equivalents increased to Rs 290.55 crore from Rs 257.05 crore. Other current assets rose by Rs 35.33 crore to Rs 168.33 crore.

How was Thangamayil Jewellery’s inventory build financed?

Thangamayil Jewellery recorded Rs 668.37 crore of net proceeds from borrowings in the six months ended September 30, 2026, compared with Rs 203.28 crore in the corresponding 2025 period. After Rs 3.61 crore of interest paid, Rs 5.60 crore of dividend paid and Rs 8.91 crore of lease-liability repayments, net cash from financing activities was Rs 569.49 crore, versus Rs 124.74 crore a year earlier.

Current borrowings rose to Rs 1,365.98 crore on September 30, 2026 from Rs 774.16 crore at March 31, 2026, an increase of Rs 591.82 crore. Non-current borrowings decreased by Rs 2.73 crore to Rs 48.68 crore over the same period. Reported borrowings across current and non-current classifications therefore increased by Rs 589.09 crore to Rs 1,414.66 crore.

The cash-flow statement does not allocate individual borrowing proceeds to specific inventory purchases. However, net financing inflows of Rs 569.49 crore exceeded the Rs 542.04 crore operating cash outflow for the half year, while total borrowings increased by Rs 589.09 crore and inventory increased by Rs 744.13 crore in the same six-month period.

Why did Thangamayil Jewellery’s operating cash flow turn negative?

Thangamayil Jewellery reported net cash used in operating activities of Rs 542.04 crore for the six months ended September 30, 2026, compared with an outflow of Rs 108.84 crore in the corresponding 2025 period. The main driver was the Rs 744.12 crore inventory cash outflow, which exceeded the Rs 249.84 crore operating profit before working-capital changes.

Other working-capital movements only partly offset the inventory use of cash. Trade receivables released Rs 17.86 crore, but other financial and non-financial assets used Rs 42.78 crore. The statement also records a Rs 100.53 crore decrease in gold loans, compared with a Rs 105.27 crore increase in the corresponding period, and a Rs 132.56 crore increase in trade payables and other liabilities, versus Rs 293.83 crore a year earlier.

Cash generated from operations was negative Rs 487.16 crore before taxes, compared with negative Rs 83.28 crore in the prior-year half. Income taxes paid rose to Rs 54.87 crore from Rs 25.57 crore, taking the final operating cash outflow to Rs 542.04 crore. Investing activities used a further Rs 61.54 crore, including Rs 37.24 crore for property, plant, equipment, intangible assets and capital advances.

What changed in Thangamayil Jewellery’s earnings and liquidity?

Thangamayil Jewellery reported profit after tax of Rs 144.55 crore for the six months ended September 30, 2026, up from Rs 104.21 crore in the corresponding period, even as operating cash flow moved further negative. Revenue rose to Rs 5,043.31 crore from Rs 3,259.92 crore, and earnings per share increased to Rs 46.51 from Rs 33.53.

The difference between reported profit and operating cash flow is visible in working capital: profit before tax was Rs 195.24 crore, while the inventory movement alone was a Rs 744.12 crore cash use. Interest and finance costs for the half year were Rs 39.93 crore, compared with Rs 31.22 crore in the prior-year period. The company’s performance highlights said realised inventory profit on gold and silver was Rs 59.27 crore, equal to 12.60% of reported gross profit for the half year.

Cash and cash equivalents fell by Rs 34.09 crore during the half year to Rs 90.09 crore at September 30, 2026, from Rs 124.18 crore at the beginning of the period. Management said that, as of November 3, 2026, overall liquidity was Rs 749 crore, including eligible undrawn drawing facilities from member banks. This measure includes available facilities and is therefore broader than the Rs 90.09 crore closing cash-and-cash-equivalents balance.

Conclusion

Thangamayil Jewellery’s September 2026 balance sheet shows a Rs 744.13 crore inventory expansion alongside a Rs 591.82 crore rise in current borrowings and a Rs 569.49 crore financing cash inflow. Revenue and profit increased in the first half, but the inventory-led cash requirement pushed operating cash flow to negative Rs 542.04 crore, compared with negative Rs 108.84 crore a year earlier.

The next disclosed unresolved matter to watch is the company’s appeal concerning the treatment of beaten, or exchange, gold as 18-carat material. Future statements will also show whether inventory, current borrowings and cash conversion change after the September 30, 2026 position, when gold hedging stood at 95% and silver hedging at 49%.