DC Infotech posts Rs 34.69 crore operating cash outflow

DC Infotech & Communication Limited reported a standalone Rs 34.69 crore net cash outflow from operating activities in the half year ended September 30, 2026, despite net profit of Rs 10.87 crore. Inventory consumed Rs 29.99 crore and other current assets, excluding advance tax, consumed Rs 21.38 crore, outweighing a Rs 26.14 crore cash release from trade receivables.

Why did DC Infotech report an operating cash outflow?

DC Infotech reported a Rs 34.69 crore operating cash outflow for the half year ended September 30, 2026 because working-capital movements exceeded the cash generated from profit adjustments. Profit before tax was Rs 14.60 crore, while adjustments including Rs 4.86 crore of interest expense, Rs 2.09 crore of interest income, Rs 1.16 crore of unrealised foreign-exchange gain and Rs 37.63 lakh of depreciation and amortisation produced Rs 16.55 crore before working-capital changes.

The cash-flow statement recorded cash generated from operations of negative Rs 34.69 crore after those working-capital movements. This differed from the reported profit outcome for the same six months, when DC Infotech earned Rs 10.87 crore after tax, compared with Rs 9.05 crore in the corresponding period of 2025. The filing therefore shows a gap between accounting profit and operating cash generation in the September half year.

For comparison, the company reported negative Rs 29.94 crore of cash generated from operations for the full year ended March 31, 2026. The half-year operating outflow was Rs 4.75 crore larger than that full-year figure, although the disclosed periods are not like for like. The September 2026 statement does not separately show an income-tax-paid amount before presenting net cash from operating activities.

Which working-capital items used DC Infotech's cash?

Inventory and other current assets were the largest disclosed cash uses for DC Infotech in the half year ended September 30, 2026. Inventory used Rs 29.99 crore, while other current assets excluding advance tax used Rs 21.38 crore. A Rs 26.14 crore reduction in trade receivables was the largest offset, but it did not cover those two outflows combined.

Trade payables used a further Rs 24.84 crore of cash, and other financial liabilities used Rs 1.38 crore. Other current liabilities used Rs 46.27 lakh, while other financial assets released Rs 67.91 lakh. These movements explain why the Rs 16.55 crore generated before working-capital changes became a Rs 34.69 crore operating outflow.

The September 30 balance sheet shows inventory at Rs 145.49 crore, up from Rs 115.50 crore at March 31, 2026. Other current assets increased to Rs 34.07 crore from Rs 11.39 crore. Trade receivables moved in the opposite direction, falling to Rs 184.34 crore from Rs 210.47 crore, consistent with the receivables cash release disclosed in the cash-flow statement.

Did DC Infotech's revenue and profit increase?

DC Infotech increased standalone revenue and profit year on year in the six months ended September 30, 2026. Revenue from operations rose to Rs 379.68 crore from Rs 301.52 crore in the corresponding six months of 2025, while profit before tax rose to Rs 14.60 crore from Rs 12.15 crore. Net profit increased to Rs 10.87 crore from Rs 9.05 crore.

The Products segment generated Rs 339.27 crore of half-year revenue, up from Rs 265.57 crore a year earlier. Security Software and Services generated Rs 40.41 crore, compared with Rs 35.94 crore. Products therefore accounted for the larger absolute increase in reported revenue, rising Rs 73.70 crore versus a Rs 4.47 crore increase in Security Software and Services.

Segment results before finance cost and unallocable cost were Rs 28.14 crore for Products and Rs 4.94 crore for Security Software and Services, for a total of Rs 33.08 crore. DC Infotech then reported Rs 6.24 crore of finance cost and Rs 12.24 crore of unallocable cost, resulting in profit before tax of Rs 14.60 crore. Finance cost was higher than Rs 3.14 crore in the corresponding six months of 2025.

How did DC Infotech fund the cash requirement?

DC Infotech reported Rs 36.30 crore of proceeds from short-term borrowings, which was its principal financing inflow in the half year ended September 30, 2026. It also recorded Rs 17.27 lakh of proceeds from long-term borrowings and paid Rs 4.86 crore of finance costs. Net cash from financing activities was Rs 31.61 crore.

Current borrowings stood at Rs 123.37 crore on September 30, 2026, compared with Rs 87.07 crore on March 31, 2026. That Rs 36.30 crore increase matches the short-term-borrowing proceeds reported in the cash-flow statement. The filing does not identify lenders, interest rates, maturity dates or the use of those facilities.

Investing activities generated Rs 1.74 crore of cash, as Rs 2.09 crore of interest received exceeded Rs 35.30 lakh spent on fixed assets. Combining the Rs 34.69 crore operating outflow, Rs 1.74 crore investing inflow and Rs 31.61 crore financing inflow resulted in a Rs 1.34 crore decline in total cash and cash equivalents, to Rs 23.85 crore at September 30 from Rs 25.19 crore at the start of the period.

What does DC Infotech's September balance sheet show?

DC Infotech's standalone total assets increased to Rs 397.12 crore at September 30, 2026 from Rs 372.64 crore at March 31, 2026. Current assets rose to Rs 388.35 crore from Rs 363.82 crore, while non-current assets declined slightly to Rs 8.77 crore from Rs 8.82 crore. Inventory and other current assets accounted for the main increases within current assets.

Trade payables to creditors other than micro and small enterprises declined to Rs 122.30 crore from Rs 145.26 crore. Amounts due to micro and small enterprises fell to Rs 16.01 crore from Rs 17.89 crore. The lower payable balances correspond with the Rs 24.84 crore cash use from trade payables shown in the half-year cash-flow statement.

Equity increased to Rs 118.76 crore from Rs 107.89 crore, while equity share capital remained Rs 16.40 crore. The balance sheet separately reports cash and cash equivalents of Rs 66.16 lakh and other bank balances of Rs 23.19 crore at September 30. The cash-flow statement's Rs 23.85 crore total includes Rs 23.19 crore of fixed deposits, Rs 59.33 lakh of bank balances and Rs 6.83 lakh of cash in hand.

Conclusion

DC Infotech reported higher first-half revenue, profit before tax and net profit in the six months ended September 30, 2026, but did not convert those earnings into operating cash. The Rs 34.69 crore outflow reflected cash absorbed by inventory, other current assets and trade-payable movements, with the receivables reduction providing only a partial offset. Short-term borrowing proceeds of Rs 36.30 crore supplied most of the financing cash inflow.

The next reported period will show whether inventory of Rs 145.49 crore and other current assets of Rs 34.07 crore convert into cash, and whether receivables remain below the March 31 level of Rs 210.47 crore. It will also provide the next disclosed measure of current borrowings, which were Rs 123.37 crore at September 30, and finance cost, which reached Rs 6.24 crore in the first half.