Zenlabs Ethica reports Rs 66.56 lakh first-half loss after costs rose

Zenlabs Ethica Limited reported a Rs 66.56 lakh loss for the half year ended 30 September 2026, compared with a Rs 7.09 lakh profit a year earlier, as total expenses reached Rs 26.26 crore and exceeded total income of Rs 25.61 crore. Revenue from operations nevertheless increased to Rs 25.58 crore from Rs 23.91 crore.

Why did Zenlabs Ethica report a first-half loss?

Zenlabs Ethica recorded the first-half loss because the increase in expenses exceeded its income growth. Total income for the half year ended 30 September 2026 rose by Rs 1.64 crore year on year to Rs 25.61 crore, including Rs 25.58 crore of revenue from operations and Rs 3.62 lakh of other income. Total expenses, however, rose by Rs 2.41 crore to Rs 26.26 crore, producing a pre-tax loss of Rs 64.47 lakh compared with a pre-tax profit of Rs 12.26 lakh in the prior-year half.

The principal movement was in stock-in-trade, where the reported expense was Rs 4.57 crore for the latest half year, against a Rs 1.07 crore reduction in the comparable period. Purchase of stock in trade also increased to Rs 19.55 crore from Rs 18.77 crore. These movements outweighed lower employee benefit expense of Rs 72.94 lakh versus Rs 2.08 crore and lower other expenditure of Rs 83.70 lakh versus Rs 3.15 crore.

How did Zenlabs Ethica perform in the September quarter?

Zenlabs Ethica narrowed its quarterly loss to Rs 9.44 lakh in the quarter ended 30 September 2026, from a Rs 57.12 lakh loss in the preceding quarter ended 30 June 2026. The September-quarter result nevertheless reversed a Rs 3.76 lakh profit recorded in the quarter ended 30 September 2025. Basic and diluted earnings per share were negative Rs 0.15, compared with negative Rs 0.88 sequentially and positive Rs 0.06 a year earlier.

Revenue from operations in the September quarter was Rs 11.40 crore, below Rs 14.18 crore in the June quarter and Rs 12.43 crore in the year-earlier quarter. Total expenses declined to Rs 11.53 crore from Rs 14.73 crore sequentially, but remained above total income of Rs 11.44 crore. Purchase of stock in trade rose to Rs 10.77 crore from Rs 8.64 crore a year earlier, while the stock-in-trade line showed a Rs 18.65 lakh reduction during the latest quarter.

Which costs changed most at Zenlabs Ethica?

Zenlabs Ethica's half-year cost profile changed most sharply in inventory-related accounting. The Rs 4.57 crore stock-in-trade expense in the latest half year contrasted with a Rs 1.07 crore reduction in the same line in the half year ended 30 September 2025. Together with the Rs 78.10 lakh increase in stock purchases, that change occurred despite several overhead lines falling from the previous year.

Employee benefit expense fell by Rs 1.35 crore to Rs 72.94 lakh, depreciation and amortisation declined to Rs 21.74 lakh from Rs 53.23 lakh, and finance costs decreased to Rs 35.28 lakh from Rs 39.85 lakh. Other expenditure decreased by Rs 2.31 crore to Rs 83.70 lakh. There were no exceptional items in either half-year comparison, so the Rs 76.73 lakh swing from pre-tax profit to pre-tax loss reflected the reported income and expense lines before tax.

What changed in Zenlabs Ethica's balance sheet and cash flow?

Zenlabs Ethica's total assets declined to Rs 29.28 crore at 30 September 2026 from Rs 37.21 crore at 31 March 2026. Current assets decreased to Rs 27.36 crore from Rs 35.10 crore, led by inventory falling to Rs 10.44 crore from Rs 15.01 crore and trade receivables declining to Rs 11.87 crore from Rs 15.70 crore. Cash and cash equivalents increased to Rs 3.53 crore from Rs 2.90 crore over the same period.

Total equity fell to Rs 7.86 crore at 30 September from Rs 8.51 crore at the March year-end, while current liabilities decreased to Rs 19.62 crore from Rs 27.12 crore. Current borrowings declined to Rs 8.25 crore from Rs 10.26 crore, whereas non-current borrowings increased to Rs 1.35 crore from Rs 16.24 lakh. The half-year cash-flow statement reported Rs 1.98 crore of net cash generated from operating activities, down from Rs 3.46 crore in the prior-year period, and financing activities used Rs 1.29 crore.

What did the review report say about Zenlabs Ethica's results?

Zenlabs Ethica's unaudited results were reviewed by the audit committee and approved by the board on 12 November 2026. The company stated that its statutory auditors had expressed an unmodified opinion in relation to the financial results. The results were prepared under Indian Accounting Standards, including Indian Accounting Standard 34 for interim financial reporting.

N Kumar Chhabra and Co. conducted a limited review of the quarter and the six months from 1 April 2026 to 30 September 2026. Its report said nothing had come to its attention that caused it to believe the statement was not prepared in accordance with the applicable accounting principles or did not disclose the information required under Regulation 33 of the Securities and Exchange Board of India listing regulations. The auditor also noted that a review is substantially narrower in scope than an audit and does not provide audit assurance.

Conclusion

Zenlabs Ethica's half-year performance combined a Rs 1.67 crore increase in revenue from operations with a Rs 2.41 crore rise in total expenses. The shift in the stock-in-trade line to an expense of Rs 4.57 crore, from a Rs 1.07 crore reduction a year earlier, coincided with the move to a Rs 66.56 lakh loss. The September-quarter loss of Rs 9.44 lakh was smaller than the June-quarter loss of Rs 57.12 lakh.

The filing does not disclose a revenue target, turnaround plan or date for the next financial results. Subsequent disclosures can clarify whether the single reported segment, trading of pharmaceutical formulations, generates sufficient income to cover stock purchases and stock-in-trade movements, and whether operating cash generation changes from the Rs 1.98 crore reported for the half year ended 30 September 2026.