Eighty Jewellers inventory build turns operating cash negative

Eighty Jewellers Limited reported net cash used in operating activities of Rs 1.55 crore for the half year ended September 30, 2026, despite profit before tax of Rs 7.52 crore, as inventory increased by Rs 9.67 crore to Rs 72.42 crore. The inventory movement exceeded the Rs 7.93 crore operating profit before working-capital changes.

Why did Eighty Jewellers report negative operating cash flow?

Eighty Jewellers reported negative operating cash flow because a Rs 9.67 crore inventory increase outweighed its Rs 7.93 crore operating profit before working-capital movements. The company generated Rs 5.36 lakh of cash from operations in the half year ended September 30, 2026; after Rs 1.60 crore of direct taxes, net operating cash flow was negative Rs 1.55 crore.

The inventory movement was larger than in the immediately preceding half year ended March 31, 2026, when inventory increased by Rs 5.77 crore and operating cash flow was positive Rs 1.86 crore. In the half year ended September 30, 2025, inventory rose by Rs 6.16 crore and operating cash flow was positive Rs 2.11 crore, making the September 2026 inventory increase Rs 3.51 crore higher year on year.

Operating profit before working-capital changes was Rs 7.93 crore in the September 2026 half year, compared with Rs 9.95 crore in the March 2026 half year and Rs 5.27 crore in the September 2025 half year. Cash generated from operations consequently declined from Rs 4.26 crore in the March 2026 half year and Rs 2.94 crore a year earlier to Rs 5.36 lakh before tax payments.

How did Eighty Jewellers’ balance sheet change by September 2026?

Eighty Jewellers’ inventory reached Rs 72.42 crore at September 30, 2026, up Rs 9.67 crore from Rs 62.75 crore at March 31, 2026 and up Rs 15.44 crore from Rs 56.98 crore a year earlier. Inventory was the largest current-asset line in the reported balance sheet, while total assets rose to Rs 84.01 crore from Rs 74.24 crore at March 31, 2026.

Cash and cash equivalents fell to Rs 1.43 crore at September 30, 2026 from Rs 2.97 crore at March 31, 2026, a decline of Rs 1.53 crore consistent with the cash-flow statement’s reported net decrease. Other current assets increased to Rs 7.52 crore from Rs 6.29 crore, while trade receivables rose to Rs 96.62 lakh from Rs 16.34 lakh over the same six-month period.

Short-term borrowings were Rs 29.94 crore at September 30, 2026, compared with Rs 29.58 crore at March 31, 2026 and Rs 26.47 crore a year earlier. Short-term provisions increased to Rs 5.03 crore from Rs 3.48 crore at March 31, 2026, while trade payables due to parties other than micro, small and medium enterprises were Rs 2.77 crore, against Rs 29.18 lakh at that date.

Share capital remained Rs 10.20 crore at September 30, 2026, unchanged from March 31, 2026, while reserves and surplus increased to Rs 32.52 crore from Rs 26.61 crore. Other long-term liabilities were Rs 1.83 crore at September 30, 2026, compared with Rs 1.81 crore at the March 2026 balance-sheet date.

Did profit convert into cash at Eighty Jewellers?

Eighty Jewellers did not convert reported pre-tax profit into positive operating cash in the September 2026 half year. Profit before tax was Rs 7.52 crore, compared with Rs 4.03 crore in the half year ended September 30, 2025, but the Rs 9.67 crore inventory increase and Rs 1.23 crore increase in other current assets reduced cash available from operations.

Net profit was Rs 5.92 crore for the half year ended September 30, 2026, compared with Rs 3.20 crore a year earlier, while basic and diluted earnings per share were Rs 5.80 against Rs 3.18. Compared with the half year ended March 31, 2026, however, net profit declined from Rs 6.54 crore and earnings per share declined from Rs 6.37.

Revenue from operations was Rs 60.05 crore in the September 2026 half year, while purchases were Rs 60.13 crore and finance cost was Rs 1.24 crore. In the March 2026 half year, purchases were Rs 67.40 crore and finance cost was Rs 1.04 crore, so finance cost was Rs 19.93 lakh higher despite purchases being Rs 7.27 crore lower.

Which working-capital movements offset Eighty Jewellers’ inventory outflow?

Eighty Jewellers received partial cash support from higher trade and other payables, which added Rs 2.16 crore in the September 2026 half year, and from short-term provisions, which added Rs 1.55 crore. These movements did not offset the Rs 9.67 crore inventory outflow, the Rs 1.23 crore other-current-assets outflow and the Rs 80.28 lakh increase in trade receivables.

Current borrowings added Rs 35.50 lakh in the cash-flow statement for the September 2026 half year, compared with additions of Rs 3.12 crore in the March 2026 half year. Other current liabilities used Rs 23.31 lakh, compared with Rs 26.92 lakh in the preceding half year, leaving inventory as the largest disclosed working-capital cash use.

Outside operations, investing activities generated Rs 1.23 crore in cash, compared with Rs 26.58 lakh in the March 2026 half year. The September 2026 figure included Rs 89.39 lakh of investment income and Rs 33.84 lakh from the reported decrease in non-current investments, while financing activities used Rs 1.22 crore, including Rs 1.24 crore of interest paid.

Conclusion

Eighty Jewellers’ September 2026 half-year figures show that higher inventory, rather than a reported operating loss, drove the negative operating cash result. Profit before tax increased to Rs 7.52 crore from Rs 4.03 crore a year earlier, but the Rs 9.67 crore inventory increase left net operating cash flow at negative Rs 1.55 crore and reduced cash and cash equivalents to Rs 1.43 crore.

Cash conversion remains unresolved because the filing discloses no inventory-reduction target, financing plan or cash-flow guidance. The next reported balance sheet will show whether inventory and other current assets continue to absorb cash while short-term borrowings, reported at Rs 29.94 crore on September 30, 2026, change further.