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Awaiting price reaction for this filing.
Transchem Limited reported weaker H1 FY26 results: total income stood at ₹331.20 lakhs versus ₹477.72 lakhs in H1 FY25, a decline of roughly 31%. Net profit for H1 FY26 came in at ₹167.25 lakhs (₹1.37 EPS) compared to ₹310.67 lakhs (₹2.54 EPS) last year, a drop of about 46%. Profit before tax margin compressed from nearly 87% to around 69%. The limited review by M/s. Mathur & Co. was clean with no qualifications. Operating cash flow turned sharply negative at ₹(4,145.65) lakhs, driven mainly by a sharp jump in loans given (₹3,202.50 to ₹7,476.90 lakhs) and a collapse in cash (₹4,234.03 to ₹87.87 lakhs). Separately, the board gave in-principle approval to acquire 100% of Greshma Shares & Stocks Limited (GSSL), a Mumbai-based stock broking and depository participant firm with FY25 turnover of ₹11.32 crore and net worth of ₹15.89 crore. The deal will be all-cash and make GSSL a wholly owned subsidiary, marking Transchem's move into the financial services sector.
Weak operating numbers and a sharp drop in profitability may weigh on the stock, but the proposed diversification into financial services through the GSSL acquisition could unlock new revenue streams in the medium term. Cash drain from lending activity is worth monitoring.