Asarfi Hospital operating cash falls as receivables rise

Asarfi Hospital Limited generated Rs 7.35 crore of net operating cash in the half year ended 30 September 2026, down from Rs 9.28 crore a year earlier, although profit after tax rose to Rs 10.41 crore because trade receivables absorbed Rs 21.12 crore of cash.

Why did Asarfi Hospital’s operating cash flow decline?

Asarfi Hospital’s net cash generated from operating activities fell to Rs 7.35 crore in the half year ended 30 September 2026 from Rs 9.28 crore in the half year ended 30 September 2025. Cash generated from operations before tax payments was Rs 9.24 crore, compared with Rs 11.74 crore a year earlier, while net tax paid declined to Rs 1.89 crore from Rs 2.46 crore.

The main reason was a larger working-capital outflow from trade receivables. Receivables used Rs 21.12 crore in the 2026 half year, versus Rs 7.05 crore in the comparable 2025 period. The Rs 14.07 crore larger use of cash more than offset the rise in operating profit before working-capital changes, which increased to Rs 22.28 crore from Rs 17.58 crore.

Trade payables provided Rs 6.03 crore of cash in the six months to 30 September 2026, up from Rs 2.24 crore in the prior-year half. Long-term provisions provided Rs 1.02 crore, compared with a Rs 56.67 lakh use of cash a year earlier, but these movements did not offset the receivables outflow.

How did receivables affect Asarfi Hospital’s cash conversion?

Asarfi Hospital’s higher receivables directly reduced the cash generated from its reported earnings in the September 2026 half year. Standalone trade receivables stood at Rs 75.18 crore at 30 September 2026, up from Rs 54.07 crore at 31 March 2026, an increase of Rs 21.12 crore that matches the working-capital cash-flow adjustment.

The filing therefore shows that the increase in receivables accounted for the difference between higher pre-working-capital operating profit and lower cash generated from operations. Operating profit before working-capital changes rose by Rs 4.70 crore year on year, but cash generated from operations declined by Rs 2.50 crore before tax payments because receivables consumed more cash.

The results do not include a receivables ageing analysis, a collection schedule or management’s explanation for the Rs 21.12 crore increase during the six-month period. Inventories, by comparison, generated Rs 43.26 lakh of cash, while standalone inventory declined to Rs 2.79 crore at 30 September 2026 from Rs 3.22 crore at 31 March 2026.

Did Asarfi Hospital’s earnings improve in the half year?

Asarfi Hospital’s profit after tax increased to Rs 10.41 crore in the half year ended 30 September 2026 from Rs 7.50 crore in the corresponding 2025 period. Revenue from operations rose to Rs 100.21 crore from Rs 80.51 crore, while total income increased to Rs 101.51 crore from Rs 82.72 crore.

Profit before tax was Rs 13.99 crore, compared with Rs 10.03 crore a year earlier, as total expenses increased to Rs 87.52 crore from Rs 72.69 crore. Employee-benefit expense rose to Rs 15.50 crore from Rs 11.88 crore, other expenses increased to Rs 41.62 crore from Rs 33.52 crore, and finance costs rose to Rs 2.44 crore from Rs 2.28 crore.

The indirect cash-flow statement added back Rs 6.18 crore of depreciation and amortisation, against Rs 5.84 crore a year earlier, and Rs 2.44 crore of finance costs. In the quarter ended 30 September 2026, profit after tax was Rs 6.14 crore, compared with Rs 4.27 crore in the quarter ended 30 June 2026; quarterly revenue from operations rose to Rs 52.87 crore from Rs 47.34 crore.

What other cash movements affected Asarfi Hospital’s cash balance?

Asarfi Hospital recorded Rs 3.90 crore of net cash used in investing activities in the half year ended 30 September 2026, compared with Rs 5.34 crore used a year earlier. Purchases of property, plant and equipment and capital work-in-progress totalled Rs 6.17 crore, above Rs 5.06 crore in the comparable half year, while investment or reclassification into term deposits used Rs 4.84 crore.

The investing outflow was partly offset by a Rs 6.57 crore movement in other non-current assets and Rs 50.17 lakh of interest received. Standalone capital work-in-progress increased to Rs 6.24 crore at 30 September 2026 from Rs 1.76 crore at 31 March 2026, while property, plant and equipment declined to Rs 103.92 crore from Rs 108.14 crore.

Financing activities used Rs 4.36 crore in the 2026 half year, compared with Rs 2.92 crore used in the previous-year period. Asarfi Hospital repaid Rs 3.86 crore of long-term borrowings, raised Rs 2.08 crore of long-term borrowings and paid Rs 2.44 crore of interest. The cash-flow statement lists closing cash and cash equivalents of Rs 5.19 crore, including Rs 3.70 crore of bank deposits maturing within three months; other bank deposits of Rs 58.54 lakh brought cash and bank balances on the standalone balance sheet to Rs 5.78 crore.

Conclusion

Asarfi Hospital’s September 2026 half-year results show a divergence between profit and operating cash. Revenue increased by Rs 19.70 crore and profit after tax increased by Rs 2.91 crore, but net operating cash flow declined to Rs 7.35 crore because the Rs 21.12 crore rise in trade receivables absorbed cash.

The key matter to watch in subsequent results is whether receivables move below the Rs 75.18 crore reported at 30 September 2026 and translate into collections. The filing does not disclose a collection target or ageing schedule, while capital work-in-progress had risen to Rs 6.24 crore and purchases of property, plant and equipment and capital work-in-progress totalled Rs 6.17 crore in the half year.