Chaman Metallics Limited used borrowings as inventory and capex rose

Chaman Metallics Limited, referred to hereafter as Chaman Metallics, funded a Rs 28.2167 crore inventory increase and Rs 22.4154 crore of property, plant and equipment purchases in the half year ended 30 September 2026 with Rs 40.9489 crore of net borrowing inflows, while net operating cash flow was Rs 2.6609 crore.

How much operating cash did Chaman Metallics generate?

Chaman Metallics generated Rs 2.6609 crore of net cash from operating activities in the half year ended 30 September 2026. Cash generated from operations was Rs 3.5426 crore and net taxes paid were Rs 88.17 lakh, based on the cash-flow statement prepared using the indirect method.

The reconciliation began with profit before tax of Rs 15.9185 crore, then added Rs 10.9255 crore of depreciation and Rs 20.8839 crore of finance cost. After other adjustments, operating profit before working-capital changes was Rs 47.6387 crore, showing that the cash result was materially affected by balance-sheet movements rather than the starting profit figure alone.

Inventory increased by Rs 28.2167 crore and current liabilities and provisions declined by Rs 24.5918 crore, together absorbing Rs 52.8085 crore of cash. A Rs 3.6156 crore decrease in trade receivables and a Rs 3.8546 crore decrease in short-term other assets partly offset those uses, leaving Rs 3.5426 crore of cash generated from operations.

Reported earnings improved from the immediately preceding half year even as working capital reduced cash conversion. Revenue from operations rose to Rs 376.5788 crore in the half year ended 30 September 2026 from Rs 344.7478 crore in the half year ended 31 March 2026, while profit before tax moved to a Rs 15.9185 crore profit from a Rs 2.0324 crore loss.

What changed in Chaman Metallics' inventory and capital work?

Chaman Metallics' inventory rose to Rs 125.2508 crore at 30 September 2026 from Rs 97.0342 crore at 31 March 2026. The Rs 28.2166 crore balance-sheet increase broadly corresponds with the Rs 28.2167 crore inventory cash outflow recorded in the cash-flow statement, with the minor difference arising from the reported figures.

Capital work in progress, abbreviated as CWIP, rose to Rs 21.1663 crore at 30 September 2026 from Rs 3.03 lakh at 31 March 2026. Chaman Metallics reported Rs 22.4154 crore of purchases of property, plant and equipment, including CWIP and capital advances, during the six-month period.

Property, plant and equipment declined to Rs 429.7781 crore from Rs 440.6858 crore despite the reported purchases, while depreciation was Rs 10.9255 crore in the half year. The filing does not identify individual projects within CWIP or capital advances, so it does not establish the nature or planned completion timing of the work.

The balance-sheet changes came alongside higher reported activity in two operating segments. Steel segment revenue increased to Rs 401.1148 crore from Rs 340.6576 crore in the preceding half year, and ferro segment revenue rose to Rs 76.2772 crore from Rs 67.3592 crore; power segment revenue declined to Rs 33.4000 crore from Rs 36.2511 crore.

How did Chaman Metallics finance its cash requirements?

Chaman Metallics received Rs 23.3526 crore of net proceeds from long-term borrowings and Rs 17.5963 crore from short-term borrowings during the half year ended 30 September 2026. Together, those cash-flow entries totalled Rs 40.9489 crore of net borrowing inflows.

Finance costs were Rs 20.8839 crore, leaving net financing cash inflow of Rs 20.0650 crore. This figure follows the stated borrowing inflows and finance-cost payment in the cash-flow statement, and was the principal reported cash source alongside Rs 2.6609 crore from operating activities.

Short-term borrowings on the balance sheet rose to Rs 109.6050 crore at 30 September 2026 from Rs 92.0088 crore at 31 March 2026. The statement lists long-term borrowings of Rs 371.8021 crore at 30 September 2026, but its comparative long-term borrowing balance is not displayed in the supplied table; the cash-flow statement therefore provides the reported measure of the Rs 23.3526 crore net long-term borrowing inflow.

Net investing cash outflow was Rs 22.7727 crore, comprising Rs 22.4154 crore of capital purchases, Rs 42.84 lakh placed in bank deposits with maturity exceeding three months, and Rs 7.11 lakh of interest received. With financing inflow of Rs 20.0650 crore, cash and cash equivalents declined by Rs 4.68 lakh to Rs 17.16 lakh from Rs 21.85 lakh.

What do Chaman Metallics' liabilities and funding plan show?

Chaman Metallics reported total assets of Rs 675.8513 crore at 30 September 2026, compared with Rs 644.2339 crore at 31 March 2026. Current assets increased to Rs 206.1464 crore from Rs 184.4184 crore, principally alongside the Rs 28.2166 crore increase in inventories.

Current liabilities declined to Rs 183.9961 crore at 30 September 2026 from Rs 192.3048 crore at 31 March 2026. Within those liabilities, trade payables to creditors other than micro and small enterprises declined to Rs 54.9196 crore from Rs 67.5952 crore, while other current liabilities fell to Rs 5.0304 crore from Rs 31.0182 crore.

Shareholders' funds were Rs 107.1610 crore at 30 September 2026, comprising Rs 24.1348 crore of share capital and Rs 83.0262 crore of reserves and surplus. Reserves and surplus increased from Rs 71.1105 crore at 31 March 2026, broadly matching the half-year net profit of Rs 11.9159 crore.

On 5 November 2026, Chaman Metallics' board withdrew and cancelled the rights-issue proposal approved on 30 May 2025 and approved a fresh rights issue of equity shares of up to Rs 100 crore. The company has not disclosed the record date, issue price, rights entitlement ratio or use of proceeds, and said the proposal is subject to applicable approvals, consents, permissions and appointment of intermediaries.

Conclusion

Chaman Metallics' half-year statements show that borrowing inflows of Rs 40.9489 crore funded a period featuring a Rs 28.2167 crore inventory cash outflow and Rs 22.4154 crore of capital purchases. Operating activities added Rs 2.6609 crore after working-capital changes, while cash and cash equivalents closed at Rs 17.16 lakh on 30 September 2026.

The next disclosed funding development is the proposed rights issue of up to Rs 100 crore approved on 5 November 2026. Chaman Metallics has yet to determine the record date, price and entitlement ratio, while the filing does not state the proposed use of proceeds; those terms and later disclosures on inventory, CWIP and borrowings are the next reported markers of its funding position.