Afcons operating cash outflow narrows as capex reaches Rs 706 crore

Afcons Infrastructure Limited used Rs 340.33 crore in operating activities in the half year ended 30 September 2026, versus Rs 668.64 crore a year earlier, but paid Rs 706.24 crore for property, plant and equipment and ended the period with Rs 4,765.03 crore of borrowings.

Why did Afcons report a smaller operating cash outflow?

Afcons reported a smaller operating cash outflow because cash used in operations fell to Rs 216.38 crore in the half year ended 30 September 2026 from Rs 487.55 crore in the corresponding 2025 period. After income-tax payments of Rs 123.95 crore, compared with Rs 181.09 crore a year earlier, net cash used in operating activities was Rs 340.33 crore, an improvement of Rs 328.31 crore.

Operating profit before working-capital changes nevertheless declined to Rs 644.90 crore from Rs 953.07 crore. The lower pre-working-capital figure accompanied profit before tax of Rs 132.97 crore, down from Rs 332.62 crore, while finance costs rose to Rs 355.39 crore from Rs 331.55 crore. Interest income increased to Rs 211.39 crore from Rs 38.31 crore in the cash-flow reconciliation.

Working-capital movements partly offset the lower operating profit. Trade receivables, including retention monies, produced a Rs 216.60 crore cash inflow in the 2026 half year, compared with a Rs 230.10 crore cash outflow in the prior-year period. Inventories generated a Rs 66.31 crore inflow after using Rs 5.90 crore a year earlier.

The main operating cash use remained contract assets, which increased by Rs 682.22 crore during the 2026 half year, after a Rs 699.30 crore increase in the 2025 half year. Contract liabilities also decreased by Rs 210.18 crore, while trade payables declined by Rs 167.88 crore. These movements kept operating cash flow negative despite the year-on-year reduction in the deficit.

How much did Afcons spend on capital expenditure?

Afcons paid Rs 706.24 crore for property, plant and equipment in the half year ended 30 September 2026, compared with Rs 234.19 crore in the corresponding 2025 period. The Rs 472.05 crore increase in these payments was the largest change within investing cash flows.

Proceeds from sales of property, plant and equipment were Rs 21.51 crore, compared with Rs 6.78 crore a year earlier. Afcons also redeemed Rs 528.09 crore of other bank balances and invested Rs 238.02 crore in such balances, versus redemptions of Rs 268.84 crore and investments of Rs 318.74 crore respectively in the previous period.

Net cash used in investing activities rose to Rs 373.61 crore from Rs 184.12 crore. Interest received was Rs 19.41 crore, below Rs 84.62 crore in the preceding half year, and insurance claims received were Rs 1.64 crore against Rs 8.57 crore. The higher equipment payments and lower interest receipts widened the investing cash deficit.

How did Afcons fund its cash requirements?

Afcons generated Rs 833.73 crore from financing activities in the half year ended 30 September 2026, compared with Rs 784.17 crore a year earlier. This financing inflow exceeded the combined Rs 713.94 crore used in operating and investing activities, enabling cash and cash equivalents to rise by Rs 119.79 crore during the period.

Long-term borrowing proceeds were Rs 502.88 crore, up from Rs 211.12 crore in the prior-year half year, while repayments were Rs 154.90 crore against Rs 198.79 crore. The resulting net long-term borrowing inflow was Rs 347.98 crore, compared with Rs 12.33 crore a year earlier. Short-term borrowing proceeds, stated net of repayments, were Rs 932.89 crore, lower than Rs 1,226.91 crore in the prior period.

Finance costs paid rose to Rs 348.33 crore from Rs 334.41 crore. Afcons also paid Rs 73.56 crore in equity dividends, compared with Rs 91.95 crore in the earlier half year, and made net principal lease payments of Rs 25.25 crore. Cash and cash equivalents ended the period at Rs 504.18 crore, versus Rs 385.70 crore at 31 March 2026.

How did Afcons’ balance-sheet debt change?

Afcons’ total borrowings rose to Rs 4,765.03 crore at 30 September 2026 from Rs 3,538.27 crore at 31 March 2026. The Rs 1,226.76 crore increase comprised a rise in non-current borrowings to Rs 1,267.58 crore from Rs 919.60 crore and an increase in current borrowings to Rs 3,497.45 crore from Rs 2,618.67 crore.

Property, plant and equipment stood at Rs 3,165.72 crore at 30 September 2026, up from Rs 2,410.37 crore at 31 March 2026. Capital work-in-progress decreased to Rs 136.66 crore from Rs 901.01 crore over the same dates. The balance sheet therefore recorded higher property, plant and equipment alongside lower capital work-in-progress during the half year.

Afcons’ additional disclosures showed a debt-equity ratio of 0.87 times for the half year ended 30 September 2026, compared with 0.64 times in the half year ended 30 September 2025 and 0.65 times for the year ended 31 March 2026. Total debt to total assets was 0.25 times, up from 0.19 times a year earlier, while the current ratio was 1.15 times versus 1.34 times.

Conclusion

Taken together, the half-year cash flows show that the Rs 328.31 crore year-on-year reduction in operating cash outflow did not cover the Rs 706.24 crore of property, plant and equipment payments. Financing activities generated Rs 833.73 crore, while total borrowings increased by Rs 1,226.76 crore between 31 March 2026 and 30 September 2026.

What to watch next is the resolution of Afcons’ disclosed claims and their conversion into cash. The Transtonnelstroy Afcons Joint Venture has recognised Rs 659.87 crore of variations and claims as non-current contract assets, while proceedings remain in arbitration, the Madras High Court and the Supreme Court; Afcons said the duration and outcome remain uncertain.