AMIC H1 FY27 profit rose 55.3% as cash flow turned negative

Amic Forging Limited (AMIC) reported H1 FY27 profit after tax of Rs 19.26 crore, up 55.3% year on year, but said cash flow from operations was negative as debtors rose following late-period machining sales. Revenue increased 46.9% to Rs 97.79 crore, while the earnings before interest, tax, depreciation and amortisation margin declined to 26.93%.

How did AMIC perform in H1 FY27?

AMIC increased H1 FY27 revenue by 46.9% year on year to Rs 97.79 crore, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 44.5% to Rs 26.34 crore. Profit after tax (PAT) grew 55.3% to Rs 19.26 crore. The company did not provide the corresponding H1 FY26 rupee amounts in its shareholder release, but reported the growth rates for all three measures.

EBITDA margin was 26.93% in H1 FY27, compared with 27.34% in H1 FY26, a reduction of 0.41 percentage points. AMIC said employee cost rose about 142% year on year because it had front-loaded investment in talent. Management said it expects this talent investment to support profitability in later periods, without quantifying the expected effect.

Why was AMIC operating cash flow negative despite higher profit?

AMIC said operating cash flow was negative primarily because of the increase in debtors, even as H1 FY27 PAT rose 55.3% to Rs 19.26 crore. This means the reported profit increase did not translate into operating cash generation during the half. The release did not disclose the operating cash flow amount, the debtor balance or the debtor-to-sales ratio.

Management said AMIC generally operates with a 90-day debtor cycle. It said the machining division went live during H1 FY27 and incremental machining sales were generated in the final three months of the period. Debtors are recorded inclusive of goods and services tax (GST), according to AMIC, so the receivables included both incremental machining sales and sales from existing capacity.

Why did AMIC debtors grow faster than revenue?

AMIC described the H1 FY27 debtors-to-sales ratio as a one-off outcome of the timing of machining sales and the usual 90-day collection cycle. Management expects debtors to normalise as sales rise and current receivables are realised. That is a management expectation rather than a reported collection outcome, and the company did not state a date for normalisation.

The machining division's capacity expanded partially during H1 FY27, according to AMIC. Its Phase 1 machining capacity is 33,000 metric tonnes per annum (MTPA), compared with 8,400 MTPA before expansion, and the planned extension would take machining capacity to 43,000 MTPA. The timing explains why sales could be booked near the end of the half while collections remained outstanding at the reporting date.

What capacity has AMIC added through Phase 1?

AMIC said Phase 1 went live on September 18, 2026, and commercial production commenced on November 12, 2026 after trial runs and statutory approvals. The Phase 1 configuration provides 48,000 MTPA of ingot capacity, 40,000 MTPA of forging capacity and 33,000 MTPA of machining capacity. Commercial production therefore began after the H1 FY27 performance period covered by the headline results.

The Phase 1 extension is designed to add 15,000 MTPA of forging capacity and 10,000 MTPA of machining capacity, while ingot capacity remains 48,000 MTPA. AMIC said it has ordered a 500-tonne press, an 800-tonne press and specialised computer numerical control (CNC) machines. Management said the extension is intended for further value-added products.

What capital expenditure is AMIC planning after H1 FY27?

AMIC said the Phase 1 extension requires capital expenditure of about Rs 58 crore, and the advance paid is classified under loans and advances. Management said its assessment of a demand-supply gap and incremental customer enquiries led to the additional forging and machining investment. The extension is expected to commence commercial production at the start of Q4 FY27.

Separately, AMIC said it ordered Phase 2 machinery from SMS of Italy worth about Rs 90 crore and ordered related infrastructure. Payments for Phase 2 began in H2 FY27, and management expects the project to go live by Q4 FY28. AMIC also said all capital work-in-progress as of H1 FY27 related to Phase 1, rather than Phase 2.

What should readers watch in AMIC's next results?

The first measure to watch is whether current debtors are converted into cash after the stated 90-day cycle. H1 FY27 revenue of Rs 97.79 crore and PAT of Rs 19.26 crore show reported growth, but negative operating cash flow makes receivable realisations relevant to whether that growth becomes cash generation in subsequent disclosures.

Management expects Phase 1 utilisation to exceed 80% by Q4 FY27, based on its internal assessment, orders in hand and new enquiries. AMIC did not disclose its order book, citing contractual obligations and strategic business reasons. It reiterated earlier guidance for triple-digit revenue and profitability growth over the next few years, while warning that actual outcomes may differ because of market, regulatory and operational risks.

Conclusion

AMIC's H1 FY27 results combined 46.9% revenue growth, 44.5% EBITDA growth and 55.3% PAT growth with a 0.41-percentage-point decline in EBITDA margin. The main counterpoint was working capital: management linked negative operating cash flow to debtors associated with incremental machining sales and its stated 90-day collection cycle.

The next disclosed milestones are the expected start of commercial production for the Rs 58 crore Phase 1 extension at the beginning of Q4 FY27, management's expectation of more than 80% Phase 1 utilisation by Q4 FY27, and Phase 2's planned commissioning by Q4 FY28. Receivable collections and progress on the Rs 90 crore Phase 2 machinery plan remain the key disclosed matters to watch.