KOCHI: Cochin Minerals and Rutile Ltd (CMRL) has been in the news for quite some time now, giving politicians and people in the government enough headaches. But mostly for reasons that have little to do with its business.
The controversy surrounding the company has generated considerable political and legal attention. But take a look at CMRL's latest annual report and another story emerges. A much quieter one.
Profit almost halved
CMRL's profit after tax (PAT) fell to Rs12.51 crore in FY26 from Rs23.56 crore in the previous year. Revenue also fell by 9.23 per cent to Rs297.19 crore. The company says the main reason was lower sales of synthetic rutile, its principal product.
What is more interesting is what is happening underneath these numbers.
The market price of synthetic rutile has come under pressure because of an oversupply of titanium feedstock and intense competition. But the price of ilmenite, the main raw material for CMRL, has not fallen in the same proportion.
In simple terms, CMRL is finding it difficult to sell its product at the old price while its main raw material has not become cheaper.
And there is another number worth looking at. Finished-goods inventory increased from Rs54.40 crore to Rs62.81 crore during the year even as sales of manufactured products declined.
Total inventory was Rs125.18 crore at the end of March 2026 - more than half of CMRL's total assets of Rs246.98 crore. Interestingly, the statutory auditor has identified inventory valuation as a key audit matter.
This is where the CMRL story gets interesting.
The company is not under any major debt pressure as several other companies that typically struggle for profit. Borrowings at the end of March were only about Rs6.21 crore and finance cost during the year was just Rs19.29 lakh.
So this is not a story of a company being weighed down by interest payments.
The pressure is coming much closer to the heart of the business.
Raw material
CMRL does not mine ilmenite. It has to buy it. And the company says domestic availability of ilmenite has declined significantly since 2010, forcing it to increasingly depend on imports.
At the other end, the global synthetic rutile market is facing oversupply and intense competition.
Cheap raw material is not available. Strong pricing power for the finished product is not available either.
The question, therefore, is whether this is simply another bad phase in a cyclical industry or whether something more fundamental is changing in the economics of CMRL's core business.
CMRL itself points to the volatility of the synthetic rutile market and says the titanium pigment sector has not yet recovered from its recession. It also says the titanium metal and sponge segment is performing well.
That raises another question: if one of the segments where premium synthetic rutile is used is doing well, why is CMRL not seeing the benefit in its own synthetic rutile business?
That may be the question worth asking - beyond the controversy that has kept CMRL in the headlines.
