A2Z Infra operating cash outflow rises to Rs 39.75 crore

A2Z Infra Engineering Limited used Rs 39.75 crore in operating activities in the six months ended September 30, 2026, compared with Rs 4.45 crore a year earlier, as a Rs 50.47 crore working-capital outflow more than offset a Rs 11.01 crore current-tax refund. Cash and cash equivalents closed at Rs 1.75 crore.

Why did A2Z Infra’s operating cash outflow rise?

A2Z Infra’s operating cash outflow rose because net working-capital changes used Rs 50.47 crore in the six months ended September 30, 2026, against Rs 14.97 crore in the corresponding 2025 period. The group reported an operating loss before working-capital changes of Rs 29.42 lakh, compared with an operating profit before working-capital changes of Rs 13.83 crore a year earlier.

The resulting cash used in operations was Rs 50.77 crore, versus Rs 1.14 crore in the prior-year half. A current-tax refund of Rs 11.01 crore reduced the final cash outflow from operating activities to Rs 39.75 crore; in the six months ended September 30, 2025, the group paid Rs 2.31 crore in current taxes.

The period-on-period change was concentrated in working capital rather than tax. Net working-capital cash use increased by Rs 35.51 crore, while the tax line moved from an outflow in the 2025 half to a refund in the 2026 half. The refund moderated the cash deficit but did not offset the changes in operating assets and liabilities.

Which working-capital items absorbed A2Z Infra’s cash?

A2Z Infra’s largest recorded working-capital use was the Rs 37.40 crore change in other financial assets, compared with Rs 14.31 lakh in the prior-year half. Trade receivables used a further Rs 13.80 crore, reversing a Rs 16.41 crore cash inflow from receivables in the six months ended September 30, 2025.

Trade payables used Rs 21.10 crore in the current half, while other liabilities provided Rs 20.20 crore. Loans used Rs 31.75 lakh, provisions used Rs 40.99 lakh and other financial liabilities used Rs 1.86 crore. Other assets, in contrast, generated Rs 4.21 crore of cash.

The September 30 balance sheet reported trade receivables of Rs 94.05 crore, up from Rs 80.31 crore on March 31, 2026. Other financial assets were Rs 98.81 crore at September 30, compared with Rs 174.70 crore at March 31; the filing does not provide a reconciliation between that closing-balance movement and the Rs 37.40 crore cash-flow use reported for other financial assets.

Management said the holding company faces acute liquidity issues because of delayed realisation of trade receivables from clients. It said it was discussing immediate recoveries with certain customers and believes a substantial portion of receivables will be realised within the upcoming year, which is management’s expectation rather than a cash collection reported as of September 30, 2026.

How did financing and investing flows affect A2Z Infra’s cash?

A2Z Infra generated Rs 28.77 crore from financing activities and Rs 9.21 crore from investing activities in the six months ended September 30, 2026. Those combined inflows of Rs 37.98 crore were below the Rs 39.75 crore operating cash outflow, leaving cash and cash equivalents Rs 1.77 crore lower over the half.

The financing inflow included Rs 27.23 crore of net proceeds from short-term borrowings and Rs 1.40 crore from the issuance of equity share capital. The statement also recorded Rs 1.62 crore under repayments of long-term borrowings, Rs 13.60 lakh of lease-liability principal payments and Rs 1.30 crore of interest paid. Net financing inflow was Rs 4.05 crore in the year-earlier half.

Investing activities changed to an inflow of Rs 9.21 crore from an outflow of Rs 36.48 lakh in the previous corresponding period. The 2026 half included Rs 7.05 crore from net fixed-deposit maturities and Rs 6.92 crore of interest received, partly offset by Rs 2.27 crore spent on property, plant and equipment and Rs 2.50 crore spent on investments.

What does A2Z Infra’s September balance sheet show?

A2Z Infra ended September 30, 2026 with cash and cash equivalents of Rs 1.75 crore, down from Rs 3.52 crore at March 31, 2026. Current assets totalled Rs 310.83 crore and current liabilities were Rs 359.53 crore, while current borrowings declined to Rs 80.91 crore from Rs 95.71 crore over the same six-month period.

Trade payables due to creditors other than micro and small enterprises declined to Rs 196.91 crore from Rs 217.80 crore. Other current liabilities rose to Rs 53.90 crore from Rs 33.70 crore, broadly corresponding with the Rs 20.20 crore cash inflow reported from the change in other liabilities in the cash-flow statement.

The filing said certain bank loan accounts of the holding company were classified as non-performing assets and that no interest had been charged on those accounts. It estimated unaccrued interest at Rs 1.09 crore for the six months ended September 30, 2026 and Rs 6.48 crore as at that date, with the exact amount under determination and reconciliation with banks.

Management said it had entered one-time settlement agreements with various lenders and was negotiating with remaining lenders. The filing also said certain lenders had applied to the Debt Recovery Tribunal and two parties had filed recovery applications with the National Company Law Tribunal; A2Z Infra described the related outstandings as disputed and the matters as sub-judice.

Conclusion

A2Z Infra’s first-half cash position reflected a sharp increase in working-capital absorption, with Rs 50.47 crore used in the six months ended September 30, 2026 against Rs 14.97 crore a year earlier. Financing and investing inflows reduced, but did not fully cover, the Rs 39.75 crore operating outflow, and period-end cash and cash equivalents were Rs 1.75 crore.

The next disclosed issue to watch is management’s plan to recover a substantial portion of trade receivables within the upcoming year. Progress on one-time lender settlements, negotiations with remaining lenders and the reconciliation of Rs 6.48 crore of estimated unaccrued interest on non-performing loan accounts will also bear on the group’s liquidity position.