Zenlabs Ethica lifts cash to Rs 3.53 crore in half-year to September

Zenlabs Ethica Limited lifted cash and cash equivalents to Rs 3.53 crore at September 30, 2026, from Rs 2.90 crore at March 31, 2026, after inventories and trade receivables declined by a combined Rs 8.40 crore, despite a Rs 66.56 lakh loss for the half year.

How did Zenlabs Ethica release cash from working capital?

Zenlabs Ethica released cash as inventories fell by Rs 4.57 crore and trade receivables fell by Rs 3.83 crore between March 31, 2026 and September 30, 2026. Inventory closed at Rs 10.44 crore, compared with Rs 15.01 crore at the financial year-end, while receivables stood at Rs 11.87 crore, down from Rs 15.70 crore.

The half-year cash-flow statement records the same movements as a Rs 4.57 crore decrease in inventories and a Rs 3.83 crore decrease in trade receivables. These reductions coincided with revenue from operations rising to Rs 25.58 crore in the half year ended September 30, 2026, from Rs 23.91 crore in the corresponding 2025 period.

The working-capital reduction was partly offset by lower trade payables. Dues to micro and small enterprises declined to Rs 3.75 crore from Rs 4.81 crore, while dues to other creditors fell to Rs 6.72 crore from Rs 10.58 crore. The cash-flow statement records a Rs 4.93 crore decrease in trade payables during the latest half year.

Other current assets increased to Rs 1.27 crore at September 30 from Rs 1.26 crore at March 31, while current tax assets were Rs 1.64 lakh compared with nil at the year-end. The reduction in inventory and receivables therefore represented the principal change among reported current assets, whose total fell to Rs 27.36 crore from Rs 35.10 crore.

What operating cash flow did Zenlabs Ethica report?

Zenlabs Ethica generated Rs 1.98 crore of net cash from operating activities in the half year ended September 30, 2026, compared with Rs 3.46 crore in the corresponding 2025 half year. The latest operating inflow was Rs 1.48 crore lower year on year, although its inventory and receivables balances declined in the current period.

The company recorded a loss before tax of Rs 64.47 lakh in the latest half year, versus a profit before tax of Rs 12.26 lakh a year earlier. Depreciation and amortisation of Rs 21.74 lakh and finance cost of Rs 35.28 lakh were included in the reconciliation from profit before tax to operating cash flow.

Cash generated from operations was Rs 2.01 crore before Rs 2.85 lakh of income-tax payments, producing the Rs 1.98 crore net operating cash inflow. The statement also reports a Rs 42.73 lakh decrease in provisions, a Rs 95.17 lakh decrease in other financial and non-financial liabilities, and a Rs 1.45 lakh increase in other financial and non-financial assets.

Investing activities used Rs 4.92 lakh in the latest half year, including Rs 5.04 lakh of capital expenditure on property, plant and equipment and Rs 12,000 of interest received. This compared with Rs 26,000 used in investing activities in the half year ended September 30, 2025.

Cash and cash equivalents increased by Rs 63.57 lakh in the six months to September 30, 2026, compared with an increase of Rs 40.34 lakh in the year-earlier half. The latest increase combined the Rs 1.98 crore operating inflow, Rs 4.92 lakh investing outflow and Rs 1.29 crore financing outflow.

How did Zenlabs Ethica change its borrowing maturity profile?

Zenlabs Ethica reduced current borrowings to Rs 8.25 crore at September 30, 2026 from Rs 10.26 crore at March 31, while non-current borrowings increased to Rs 1.35 crore from Rs 16.24 lakh. The balance-sheet movements show both a reduction in borrowings due within a year and a higher reported amount in the non-current category.

Total reported borrowings were Rs 9.59 crore at September 30, calculated from current and non-current borrowings, compared with Rs 10.43 crore at March 31. The total was therefore lower by Rs 82.83 lakh, rather than the movement being solely a change in the maturity classification of the same debt.

The financing cash-flow statement records Rs 1.19 crore of proceeds from long-term borrowings and Rs 2.02 crore of repayments of short-term borrowings during the half year. It also records Rs 31.88 lakh of interest paid, Rs 11.57 lakh of lease-liability principal payments and Rs 2.76 lakh of interest payments on lease liabilities.

Net cash used in financing activities was Rs 1.29 crore in the latest half year, against Rs 3.06 crore in the corresponding 2025 period. Non-current lease liabilities declined to Rs 19.24 lakh from Rs 31.97 lakh, while current lease liabilities increased to Rs 24.30 lakh from Rs 23.15 lakh over the March-to-September balance-sheet comparison.

Did higher cash coincide with better half-year earnings?

Zenlabs Ethica's higher cash balance did not coincide with a return to first-half profitability, as the company reported a Rs 66.56 lakh net loss for the half year ended September 30, 2026. It had reported a Rs 7.09 lakh net profit in the corresponding half year of 2025.

Total income rose to Rs 25.61 crore from Rs 23.98 crore, but total expenses increased to Rs 26.26 crore from Rs 23.85 crore. The latest half-year expenses exceeded total income by Rs 64.47 lakh before tax, whereas the prior-year period produced Rs 12.26 lakh of profit before tax.

Purchases of stock in trade increased to Rs 19.55 crore from Rs 18.77 crore. The change in stock-in-trade was an expense of Rs 4.57 crore in the latest half year, compared with a Rs 1.07 crore credit in the prior-year period; employee benefit expense fell to Rs 72.94 lakh from Rs 2.08 crore and other expenditure fell to Rs 83.70 lakh from Rs 3.15 crore.

The quarter ended September 30 showed a smaller loss than the preceding June quarter. Zenlabs Ethica reported a Rs 9.44 lakh net loss in the September quarter, compared with a Rs 57.12 lakh loss in the June quarter, although quarterly revenue declined to Rs 11.40 crore from Rs 14.18 crore.

Conclusion

Zenlabs Ethica ended the September 2026 half year with Rs 3.53 crore of cash, up Rs 63.57 lakh from the March year-end, as inventory and receivables fell by Rs 8.40 crore. Current borrowings declined by Rs 2.02 crore and total reported borrowings declined by Rs 82.83 lakh, while the company remained loss-making and operating cash flow fell from the prior-year level.

The next results will show whether the September-quarter loss of Rs 9.44 lakh, compared with Rs 57.12 lakh in the June quarter, is sustained or reversed. They will also show whether the lower Rs 10.44 crore inventory, Rs 11.87 crore receivables and Rs 8.25 crore current-borrowing balances persist after the half-year cash release.