Finolex Cables H1 FY27 cash flow turned negative at Rs 106.05 crore

Finolex Cables Limited reported negative operating cash flow of Rs 106.05 crore in H1 FY27, even as consolidated profit after tax rose 60.5% year on year to Rs 522 crore; inventory increased to Rs 1,483.21 crore and inventory days reached 77. The figures show that reported earnings growth and operating cash generation moved in different directions during the half year.

Why did Finolex Cables operating cash flow turn negative in H1 FY27?

Finolex Cables reported net cash flow from operating activities of negative Rs 106.05 crore in H1 FY27, compared with positive Rs 49.08 crore in FY26 and positive Rs 207.25 crore in FY25. The H1 FY27 outflow followed positive operating cash flow of Rs 576.90 crore in FY24, showing considerable variation in reported cash conversion across the disclosed periods.

The presentation does not provide a component-by-component reconciliation of operating cash flow, so it does not assign a precise cash-flow effect to individual working-capital lines. However, inventories increased by Rs 460.04 crore from Rs 1,023.17 crore at FY26 to Rs 1,483.21 crore at H1 FY27, while trade receivables rose by Rs 80.57 crore to Rs 450.65 crore. These balance-sheet movements coincided with the operating cash outflow.

Finolex Cables' cash and cash equivalents fell to Rs 93.15 crore at H1 FY27 from Rs 163.13 crore at FY26, a decline of Rs 69.98 crore that matched the reported net decrease in cash and cash equivalents. Investing activities generated Rs 40.03 crore in H1 FY27, while financing activities used Rs 3.96 crore, alongside the operating outflow of Rs 106.05 crore.

How did Finolex Cables working capital change in H1 FY27?

Finolex Cables held inventory for 77 days in H1 FY27, up from 64 days in H1 FY26 and 73 days in Q2 FY27. Receivable days rose to 19 in H1 FY27 from 15 in H1 FY26, while payable days declined to 14 from 22. The disclosed measures show more days in inventory and receivables, alongside fewer payable days than a year earlier.

Inventories were the largest reported current-asset change, increasing 45.0% from Rs 1,023.17 crore at FY26 to Rs 1,483.21 crore at H1 FY27. Trade receivables increased 21.8% from Rs 370.08 crore to Rs 450.65 crore over the same period. Total current assets rose to Rs 4,276.21 crore from Rs 3,531.97 crore, while total current liabilities increased to Rs 610.51 crore from Rs 419.61 crore.

Finolex Cables recorded higher sales and cost of goods sold during the half year. Consolidated revenue rose 54.5% year on year to Rs 4,282 crore in H1 FY27, while cost of goods sold increased 53.9% to Rs 3,440 crore. Electrical cables revenue increased to Rs 3,728 crore from Rs 2,393 crore, and communication cables revenue rose to Rs 406 crore from Rs 215 crore, although the presentation does not disclose inventory by segment.

Did Finolex Cables profit growth convert into operating cash?

Finolex Cables' profit growth did not translate into positive operating cash flow in H1 FY27. Consolidated profit after tax rose to Rs 522 crore from Rs 325 crore in H1 FY26, an increase of 60.5%, while operating cash flow was negative Rs 106.05 crore. The presentation does not provide the detailed cash-flow reconciliation needed to attribute the difference between these two measures line by line.

Operating profitability improved in the income statement. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 97.3% to Rs 555 crore in H1 FY27 from Rs 281 crore in H1 FY26, and EBITDA margin increased by 281 basis points to 13.0% from 10.2%. Gross profit rose 57.0% to Rs 842 crore, while gross margin increased by 31 basis points to 19.7%.

Both main cable segments reported higher earnings before interest and tax, or EBIT. Electrical cables EBIT increased to Rs 399 crore in H1 FY27 from Rs 247 crore in H1 FY26, while communication cables EBIT rose to Rs 121.39 crore from Rs 2.51 crore. Finolex Cables attributed communication-cables profitability to demand for optical fibre cables and better margins, but disclosed no working-capital target or cash-conversion forecast.

What does Finolex Cables' balance sheet show about funding?

Finolex Cables reported consolidated debt-to-equity of 0.00013 times at H1 FY27, with total equity of Rs 6,483.98 crore. The balance sheet listed non-current borrowings of Rs 79 lakh and current borrowings of Rs 7 lakh. The reported operating cash outflow was therefore not accompanied by a material increase in stated borrowings.

Finolex Cables held Rs 1,814.65 crore of current investments at H1 FY27, compared with Rs 1,875.27 crore at FY26, in addition to Rs 93.15 crore of cash and cash equivalents. Investments in associates and joint ventures increased to Rs 1,665.86 crore from Rs 1,600.61 crore. The presentation does not specify whether any of these investments are intended to fund working-capital requirements.

Property, plant and equipment increased to Rs 887.80 crore at H1 FY27 from Rs 831.42 crore at FY26, while capital work-in-progress declined to Rs 89.15 crore from Rs 105.20 crore. Finolex Cables also describes five manufacturing units and ongoing capacity expansion, but the presentation gives no H1 FY27 capital-expenditure amount or commissioning timetable.

Conclusion

Finolex Cables' H1 FY27 disclosures show a contrast between earnings and cash generation. Consolidated revenue reached Rs 4,282 crore, profit after tax was Rs 522 crore and EBITDA margin rose to 13.0%, while operating cash flow was negative Rs 106.05 crore. The rise in inventory to Rs 1,483.21 crore, receivables to Rs 450.65 crore and inventory days to 77 coincided with that cash outflow.

The next reported periods should show whether inventory days move from 77, receivable days move from 19 and payable days recover from 14. Investors can also track cash and cash equivalents after their fall from Rs 163.13 crore at FY26 to Rs 93.15 crore at H1 FY27, alongside Finolex Cables' disclosed ongoing capacity expansion.