Bhatia's H1 FY27 cash outflow widens to Rs 18.4 crore

Bhatia Communications & Retail (India) Ltd., subsequently Bhatia's, reported an Rs 18.4 crore net operating cash outflow in H1 FY27, compared with an Rs 5.9 crore outflow in H1 FY26, as working-capital movements absorbed Rs 34.4 crore. Inventory rose to Rs 148 crore at September 2026 from Rs 96.3 crore at March 2026.

Why did Bhatia's operating cash outflow widen?

Bhatia's operating cash outflow widened because Rs 21.7 crore of cash flow from operations before working-capital changes was outweighed by Rs 34.4 crore of working-capital absorption and Rs 5.8 crore of direct taxes paid or adjusted. Cash generated from operations was therefore negative Rs 12.7 crore, and net cash flow from operating activities was negative Rs 18.4 crore in the six months ended September 2026.

The underlying pre-working-capital cash generation increased from Rs 11.2 crore at September 2025 to Rs 21.7 crore at September 2026, a rise of Rs 10.5 crore. However, the working-capital movement increased from negative Rs 12.3 crore to negative Rs 34.4 crore, while direct taxes paid or adjusted rose from Rs 4.8 crore to Rs 5.8 crore.

The cash-flow statement starts with profit before tax, which increased from Rs 9.5 crore in H1 FY26 to Rs 18.9 crore in H1 FY27. Depreciation increased from Rs 1.5 crore to Rs 2.6 crore, interest expense moved from Rs 1.5 crore to Rs 1.4 crore, and interest income remained Rs 1.3 crore in both periods.

What balance-sheet movements coincided with the outflow?

Bhatia's inventory increased by Rs 51.7 crore to Rs 148 crore at September 2026 from Rs 96.3 crore at March 2026, the largest disclosed increase among current assets. Trade receivables rose by Rs 3.2 crore to Rs 11.5 crore, while other current assets increased by Rs 8.7 crore to Rs 32.2 crore over the same six-month period.

Total current assets rose by Rs 73.6 crore to Rs 210.3 crore between March 2026 and September 2026, compared with a Rs 3.2 crore increase in non-current assets to Rs 65.1 crore. Cash and cash equivalents increased by Rs 8.1 crore to Rs 16.7 crore, and investments of Rs 1.8 crore were reported at September 2026 where no balance was shown at March 2026.

Property, plant and equipment increased by Rs 3.6 crore to Rs 26.1 crore at September 2026. Right-of-use assets declined by Rs 80 lakh to Rs 5.7 crore, while loans declined by Rs 40 lakh to Rs 12.1 crore and other financial assets increased by Rs 60 lakh to Rs 20.3 crore.

The cash-flow statement reports a combined Rs 34.4 crore working-capital movement rather than allocating the amount to inventory, receivables or other current assets. It therefore establishes that these balance-sheet movements occurred alongside the cash absorption, but does not quantify the cash-flow effect of each individual account.

How did Bhatia's funding and cash balance change?

Bhatia's financing activities generated Rs 32.7 crore in the six months to September 2026, compared with Rs 27.2 crore in the prior-year period. This financing inflow exceeded the combined Rs 18.4 crore operating outflow and Rs 6.2 crore investing outflow, resulting in an Rs 8.1 crore increase in cash and cash equivalents.

Cash and cash equivalents increased from Rs 8.6 crore at the beginning of the year to Rs 16.7 crore at September 2026, matching the balance-sheet position at March 2026 and September 2026. In H1 FY26, cash and cash equivalents rose by Rs 6.3 crore, from Rs 6.7 crore at the beginning of the year to Rs 13 crore at the end of September 2025.

Current borrowings increased to Rs 36.7 crore at September 2026 from Rs 1.9 crore at March 2026, an increase of Rs 34.8 crore. Non-current borrowings moved in the opposite direction, declining by Rs 40 lakh to Rs 1.1 crore, while total current liabilities increased by Rs 40.4 crore to Rs 60.9 crore.

Other non-current liabilities increased by Rs 23.1 crore to Rs 61 crore at September 2026 from Rs 37.9 crore at March 2026. Trade payables rose by Rs 3.1 crore to Rs 19.5 crore, provisions increased to Rs 2.1 crore from no reported balance, and current tax liabilities rose by Rs 80 lakh to Rs 1.3 crore.

Did higher earnings cover Bhatia's working-capital requirement?

Bhatia's higher earnings increased cash flow before working-capital changes, but did not cover the Rs 34.4 crore working-capital movement and Rs 5.8 crore tax payment or adjustment. H1 FY27 revenue increased 60% to Rs 393.7 crore, gross profit rose 85% to Rs 48.1 crore, and EBITDA, or earnings before interest, tax, depreciation and amortisation, increased 84% to Rs 23 crore.

Net profit rose 96% to Rs 14.3 crore in H1 FY27 from Rs 7.3 crore in H1 FY26. The net-profit margin increased by 66 basis points to 3.6% from 3%, while gross margin increased by 163 basis points to 12.2% and EBITDA margin increased by 75 basis points to 5.8%.

Bhatia's H1 FY27 operational disclosures showed 428 stores, compared with 253 stores in H1 FY26, while retail footprint increased to 3,25,000 square feet from 1,93,697 square feet. Same-store sales growth was 32.1% in H1 FY27 against 6.8% in H1 FY26, and average selling price increased to Rs 27,063 from Rs 18,476.

Mobiles accounted for 98% of product mix in H1 FY27, compared with 97% in H1 FY26. Bill cuts increased to 149,000 from 130,000, while mobile accessories represented 1% of product mix, down from 2%, and lifestyle remained 1% in both periods.

Conclusion

Bhatia's H1 FY27 results show profit growth alongside higher cash absorption from working capital. Net profit rose to Rs 14.3 crore and pre-working-capital operating cash flow increased to Rs 21.7 crore, but inventory reached Rs 148 crore and the company reported an Rs 18.4 crore operating cash outflow. Financing inflows of Rs 32.7 crore supported an increase in cash to Rs 16.7 crore, while current borrowings rose to Rs 36.7 crore.

The next reporting period will show whether the Rs 34.4 crore working-capital absorption moderates as Bhatia's 428-store network operates over a longer period. The presentation does not disclose a target for inventory, operating cash flow or borrowings, leaving subsequent balance-sheet and cash-flow statements to show how inventory, current borrowings and cash conversion develop.