Aakaar Medical reports operating cash outflow despite profit

Aakaar Medical Technologies Limited, referred to here as Aakaar Medical, reported Rs 3.54 crore of profit for the half year ended September 30, 2026, but used Rs 14.67 crore in operating activities. A Rs 16.99 crore increase in trade receivables and a Rs 6.19 crore inventory increase were the largest reported uses of operating cash.

Why did Aakaar Medical report an operating cash outflow?

Aakaar Medical recorded net cash used in operating activities of Rs 14.67 crore for the half year ended September 30, 2026, despite profit before tax of Rs 4.82 crore. Under the indirect cash-flow method, profit before changes in operating assets and liabilities was Rs 5.46 crore after adjustments that included Rs 80.85 lakh of finance costs and Rs 6.81 lakh of depreciation and amortisation.

The largest cash use was the Rs 16.99 crore increase in trade receivables. Inventories consumed a further Rs 6.19 crore, while other assets increased by Rs 53.05 lakh. These movements exceeded cash inflows from a Rs 4.19 crore increase in trade payables, Rs 82.59 lakh in other current liabilities, Rs 41.68 lakh in provisions and Rs 1.67 lakh from lower loans and advances.

Cash generated from operations was negative Rs 12.80 crore, compared with negative Rs 6.11 crore for the year ended March 31, 2026. Net income tax paid was Rs 1.87 crore in the September half year, taking the operating cash outflow to Rs 14.67 crore, versus Rs 8.36 crore for the preceding full year.

How did Aakaar Medical's receivables and inventory change?

Aakaar Medical's trade receivables rose to Rs 54.21 crore at September 30, 2026, from Rs 37.23 crore at March 31, 2026. The Rs 16.99 crore balance-sheet increase matches the receivables movement reported in the cash-flow statement.

Inventories increased to Rs 25.94 crore from Rs 19.75 crore over the six months. This Rs 6.19 crore increase was reported as an operating cash use, while purchases of stock-in-trade were Rs 26.34 crore during the half year.

Trade payables rose by Rs 4.21 crore on the balance sheet, including a Rs 3.54 crore increase in dues to micro and small enterprises and a Rs 66.51 lakh increase in other creditor dues. The cash-flow statement reports a Rs 4.19 crore increase in trade payables, while other current liabilities increased to Rs 2.87 crore from Rs 2.04 crore.

How did Aakaar Medical's revenue and profit compare with cash generation?

Aakaar Medical reported net profit of Rs 3.54 crore for the half year ended September 30, 2026, compared with a Rs 78.41 lakh loss in the corresponding half year ended September 30, 2025. Revenue from operations rose to Rs 43.72 crore from Rs 25.32 crore, and profit before tax moved from a Rs 1.02 crore loss to Rs 4.82 crore profit.

Aesthetic Products accounted for most of the revenue increase, with segment revenue rising to Rs 40.27 crore from Rs 21.97 crore a year earlier. Aesthetic Devices and Device consumables recorded Rs 3.45 crore of revenue, compared with Rs 3.35 crore in the September 2025 half year.

Segment operating profit was Rs 22.47 crore, before Rs 8.07 crore of employee benefit expense, Rs 9.04 crore of other expense and Rs 80.85 lakh of finance costs. The cash-flow statement shows that higher receivables and inventories absorbed cash despite the increase in revenue and reported profit; it does not disclose collection days, inventory days or customer-level payment information.

What happened to Aakaar Medical's cash balance and financing cash flow?

Aakaar Medical reported a net decrease of Rs 14.97 crore in cash and cash equivalents during the half year. Cash and cash equivalents fell from Rs 16.03 crore at the beginning of the year to Rs 1.06 crore at September 30, 2026, according to the cash-flow statement.

Investing activities generated Rs 5.39 lakh of net cash in the half year. The company reported Rs 41.80 lakh spent on fixed assets, offset by Rs 40.01 lakh of interest received and Rs 7.18 lakh related to term deposits; non-current property, plant and equipment rose to Rs 24.15 lakh from Rs 16.94 lakh.

Financing activities used Rs 35.51 lakh, compared with Rs 18.80 crore generated in the year ended March 31, 2026. The September-half movement included Rs 35.11 lakh of proceeds from a cash credit or overdraft facility and Rs 70.52 lakh of finance costs, while short-term borrowings rose to Rs 18.89 crore from Rs 18.53 crore.

What did Aakaar Medical disclose about IPO proceeds and liabilities?

Aakaar Medical said it had utilised all Rs 27 crore of initial public offering proceeds by September 30, 2026. The stated use was Rs 20.35 crore for working capital, Rs 3.29 crore for general corporate purpose and Rs 3.36 crore for issue expenses paid with goods and services tax.

Share capital was Rs 14.17 crore at September 30, unchanged from March 31, while reserves and surplus increased to Rs 43.92 crore from Rs 40.38 crore. Total assets rose to Rs 88.50 crore from Rs 79.42 crore, and total liabilities increased to Rs 30.41 crore from Rs 24.87 crore.

The audit committee reviewed the financial results and the board approved them on October 30, 2026. Aakaar Medical stated that the cash-flow statement was prepared using the indirect method set out in Accounting Standard 3, which reconciles profit before tax with changes in operating assets and liabilities.

Conclusion

The combined figures show that working-capital movements, rather than the reported profit figure alone, determined cash generation in the first half. The Rs 4.19 crore cash inflow from higher trade payables and Rs 82.59 lakh increase in other current liabilities only partly offset the receivables and inventory movements.

The next disclosure to watch is whether the Rs 54.21 crore receivables balance and Rs 25.94 crore inventory balance decline or continue to require cash. This remains an unresolved matter in the filing because Aakaar Medical did not provide collection periods, inventory turnover measures or customer payment details.