Divi’s Laboratories reported a 63.6% rise in consolidated net profit to ₹1,127 crore for the quarter ended September 30, 2026. Revenue from operations increased 35.4% to ₹3,676 crore in results approved on November 7.
Across the first half, however, operating cash inflow fell 76.7% to ₹384 crore from ₹1,645 crore a year earlier. Profit for that same six-month period rose 64.4% to ₹2,029 crore. The difference brings the money held in inventories and other operating balances into view.
The Breakdown
Inventories stood at ₹5,540 crore at September-end, up from ₹3,954 crore at the end of March. The cash-flow statement records ₹1,585 crore absorbed by the inventory movement during the half-year, compared with ₹197 crore a year earlier.
The trade-receivables movement absorbed another ₹604 crore, whereas it had released ₹188 crore in the earlier period. Higher trade payables provided a ₹561 crore offset. After all operating-asset and liability movements, cash generated from operations was ₹959 crore. Tax payments of ₹575 crore then brought net operating inflow down to ₹384 crore.
These figures describe where cash moved during the six months. They do not, on their own, establish why inventories increased or when the stock will convert into customer payments.
The earlier inventory explanation
Management had discussed a stock-building decision on August 1, when presenting the June-quarter performance. It said Divi’s was securing materials on a rolling three-month basis to reduce the risk of production stoppages and shipment delays. Materials associated with validation batches for new capital projects were also contributing to stock levels.
That explanation is relevant background to the larger inventory balance. It relates to the June quarter, however, and does not divide the September-end increase between the materials buffer, validation work and other factors. The November results themselves provide no such breakdown.
For a manufacturer, holding more material can protect production while requiring cash before the resulting product is delivered and paid for. The useful question is how the inventory supports the business and how quickly the money returns through sales and collections.
Investment and deposits
Divi’s also paid ₹872 crore for property, plant and equipment and ₹797 crore in dividends during the half-year. These sit outside operating cash flow. Separately, withdrawals from deposits exceeded new deposit investments by ₹1,353 crore.
Cash and cash equivalents plus other bank balances totalled ₹2,236 crore at September-end, compared with ₹3,414 crore at March-end. The figures show the wider funding picture alongside the weaker operating inflow.
The Crunch
Divi’s entered the second half with higher sales and profit, but also more money tied up in operating balances. Its earlier buffer policy explains why inventory deserves context. Following the stock through production, deliveries and collections will matter alongside the next earnings number.
