AJC Jewel funds working capital with Rs 24.2666 crore borrowings

AJC Jewel Manufacturers Limited reported negative operating cash flow of Rs 16.5968 crore for the half year ended 30 September 2026, despite standalone profit after tax of Rs 5.5920 crore, as inventory and trade receivables expanded. AJC Jewel increased long-term and short-term borrowings by a combined Rs 24.2666 crore during the period.

Why did AJC Jewel's operating cash flow turn negative?

AJC Jewel's operating cash flow turned negative because working-capital outflows exceeded the operating profit generated before those movements. The company reported operating profit before working-capital changes of Rs 10.3898 crore for the half year ended 30 September 2026, including profit before tax of Rs 7.5804 crore, finance cost of Rs 2.7027 crore and depreciation and amortisation of Rs 0.2819 crore.

The cash-flow statement records Rs 28.4002 crore of net cash absorption through working-capital movements. Sundry debtors increased by Rs 9.6900 crore and inventories increased by Rs 19.9090 crore. Increases in sundry creditors and current liabilities provided Rs 0.3830 crore and Rs 0.3914 crore respectively, while a Rs 0.8102 crore decrease in current assets partly offset the outflow.

Cash generated from operating activities was negative Rs 13.6246 crore before income tax. After income tax of Rs 2.9722 crore, net cash flow from operating activities was negative Rs 16.5968 crore. The reported half-year profit therefore did not convert into operating cash during the period because cash was absorbed by debtors and jewellery inventory.

How much did AJC Jewel's inventory and receivables increase?

AJC Jewel's inventory rose by Rs 15.9090 crore and trade receivables rose by Rs 9.6900 crore between 31 March 2026 and 30 September 2026. Inventory stood at Rs 39.9041 crore at 30 September, compared with Rs 23.9951 crore at the March year-end. Trade receivables reached Rs 50.2993 crore from Rs 40.6093 crore.

Together, inventory and receivables rose by Rs 25.5990 crore on the balance sheet. The cash-flow statement shows a Rs 19.9090 crore inventory outflow, which is Rs 4.0000 crore more than the balance-sheet increase; the filing does not provide a reconciliation. The Rs 9.6900 crore debtor outflow matches the balance-sheet increase in trade receivables.

Cash and cash equivalents nevertheless increased to Rs 2.6516 crore at 30 September 2026 from Rs 1.3615 crore at 31 March 2026. This increase occurred because financing inflows of Rs 20.7453 crore exceeded the combined cash used by operating and investing activities.

How did AJC Jewel finance its cash requirements?

AJC Jewel financed the period's cash requirements principally through higher borrowings. Long-term borrowings increased by Rs 7.3906 crore and short-term borrowings increased by Rs 16.8760 crore in the cash-flow statement, a combined increase of Rs 24.2666 crore. After finance-cost cash payments of Rs 2.7012 crore, net cash from financing activities was Rs 20.7453 crore.

The balance sheet shows long-term borrowings at Rs 8.2579 crore on 30 September 2026, compared with Rs 0.8674 crore on 31 March 2026. Short-term borrowings rose to Rs 60.1315 crore from Rs 43.2556 crore. Total reported borrowings consequently increased to Rs 68.3894 crore from Rs 44.1230 crore.

Net financing cash of Rs 20.7453 crore covered the negative Rs 16.5968 crore operating cash flow and negative Rs 2.8584 crore investing cash flow, producing a net cash increase of Rs 1.2902 crore. The half-year cash-flow statement records no increase or decrease in share capital, so the disclosed funding increase came through borrowings rather than new equity.

What did AJC Jewel spend on investing activities?

AJC Jewel used Rs 2.8584 crore in investing activities during the half year ended 30 September 2026. The disclosed uses included Rs 1.6720 crore invested in equity shares and Rs 1.0347 crore of additions to property, plant and equipment. Other non-current assets increased by Rs 0.1531 crore in the cash-flow statement.

Non-current investments were Rs 2.6400 crore at 30 September 2026, against Rs 0.9680 crore at 31 March 2026. Property, plant and equipment increased to Rs 5.7331 crore from Rs 5.0054 crore, while intangible assets rose to Rs 0.1160 crore from Rs 0.0910 crore. Long-term loans and advances were Rs 0.8200 crore at September, compared with nil at March.

The Rs 25.5990 crore balance-sheet increase in inventory and receivables was substantially larger than the Rs 2.8584 crore investing cash outflow. The disclosed Rs 24.2666 crore increase in borrowings broadly matched the scale of the expansion in these two working-capital balances, although the filing does not allocate borrowings to individual uses.

Did AJC Jewel remain profitable while operating cash flow declined?

AJC Jewel remained profitable in the half year even as operating cash flow was negative. Standalone revenue from operations was Rs 213.6651 crore for the half year ended 30 September 2026, compared with Rs 119.1725 crore in the corresponding half year ended 30 September 2025. Standalone profit after tax rose to Rs 5.5920 crore from Rs 2.6088 crore.

Profit before tax increased to Rs 7.5804 crore from Rs 3.5877 crore in the year-earlier half year. Finance costs rose to Rs 2.7027 crore from Rs 1.4019 crore over the same comparison. AJC Jewel states that it manufactures and trades gold and silver jewellery and has no separate reportable segments under the applicable accounting standard.

The quarter ended 30 September 2026 produced standalone revenue from operations of Rs 112.3737 crore, compared with Rs 74.0740 crore in the September 2025 quarter. Quarterly profit after tax was Rs 3.0720 crore, compared with Rs 2.0406 crore a year earlier. The filing does not disclose a management target, collection plan, inventory policy or debt-reduction plan.

Conclusion

AJC Jewel's September 2026 half-year results combine higher revenue and profit with a cash-conversion gap. Inventory and receivables increased by Rs 25.5990 crore, while operating cash flow after tax was negative Rs 16.5968 crore. Higher borrowings, which rose by Rs 24.2666 crore in the cash-flow statement, supplied the principal disclosed funding source.

The unresolved matter is whether the Rs 39.9041 crore inventory balance and Rs 50.2993 crore receivables balance convert into operating cash while borrowings stand at Rs 68.3894 crore. AJC Jewel's 13 November 2026 filing provides no target or formal plan for working-capital reduction, receivable collections or debt repayment.