Foods & Inns inventory build drives Rs 52.65 crore cash outflow

Foods and Inns Limited, referred to here as Foods & Inns, reported Rs 52.65 crore of net cash used in operating activities in the half year ended September 30, 2026, compared with Rs 55.34 crore generated a year earlier, as inventories increased by Rs 147.67 crore during its seasonal mango procurement and processing period.

Why did Foods & Inns report negative operating cash flow?

Foods & Inns reported negative operating cash flow because a Rs 147.67 crore increase in inventories outweighed Rs 28.01 crore of operating profit before working-capital changes in the half year ended September 30, 2026. Cash used in operations was Rs 51.49 crore, versus cash generated from operations of Rs 56.01 crore in the corresponding half year ended September 30, 2025. After Rs 1.16 crore of net income-tax payments, the operating cash outflow was Rs 52.65 crore.

The inventory movement was the largest listed working-capital use of cash in the period. A Rs 15.55 crore decrease in trade receivables released cash, but a Rs 17.03 crore decrease in trade payables used cash. Other financial liabilities increased by Rs 57.32 crore and other liabilities and provisions increased by Rs 16.82 crore, partly offsetting the inventory outflow.

Foods & Inns' operating profit before working-capital changes fell by Rs 19.94 crore year on year, from Rs 47.95 crore to Rs 28.01 crore. The cash-flow statement recorded a pre-tax loss of Rs 16.68 lakh for the September 2026 half year, against a pre-tax profit of Rs 13.05 crore in the prior-year period, before adding back non-cash and financing-related items including Rs 11.46 crore of depreciation and amortisation and Rs 23.52 crore of finance costs.

How much did Foods & Inns' inventory rise in September 2026?

Foods & Inns' inventories rose to Rs 769.72 crore at September 30, 2026 from Rs 622.05 crore at March 31, 2026, an increase of Rs 147.67 crore over six months. The balance-sheet movement corresponds with the inventory increase reported as a cash-flow adjustment for the half year, although the statements are presented on different accounting formats.

Foods & Inns said its business is seasonal and that a major part of its raw material, mainly mango, is procured and processed in the first and second quarters. Management said this pattern results in higher inventory and working-capital requirements in the first half, while sales are spread across the year. It also said first-half sales are not indicative of full-year results.

Current assets increased by Rs 150.60 crore to Rs 1,068.48 crore at September 30 from Rs 917.88 crore at March 31. Besides inventory, trade receivables fell by Rs 17.48 crore to Rs 125.05 crore, while cash and cash equivalents on the balance sheet increased by Rs 3.46 crore to Rs 3.83 crore and loans increased by Rs 6.56 crore to Rs 69.50 crore.

Revenue from operations declined to Rs 317.19 crore in the half year ended September 30, 2026 from Rs 418.98 crore a year earlier. Cost of materials consumed also fell, to Rs 271.73 crore from Rs 430.82 crore, while the line item for changes in inventories of finished goods and work-in-progress was negative Rs 118.77 crore, compared with negative Rs 183.46 crore in the corresponding period.

How did Foods & Inns' borrowings change?

Foods & Inns' total reported borrowings increased by Rs 127.55 crore to Rs 538.64 crore at September 30, 2026 from Rs 411.09 crore at March 31, 2026. This total combines current borrowings and non-current borrowings reported in the standalone balance sheet. Current borrowings accounted for Rs 447.57 crore of the September balance, while non-current borrowings were Rs 91.06 crore.

Current borrowings rose by Rs 89.25 crore over the six months, from Rs 358.32 crore, and non-current borrowings rose by Rs 38.30 crore, from Rs 52.76 crore. Total liabilities increased by Rs 178.39 crore to Rs 894.33 crore, while equity attributable to owners decreased by Rs 1.78 crore to Rs 571.68 crore during the same period.

The cash-flow statement showed Rs 65.99 crore of net proceeds from current borrowings in the September 2026 half year. Foods & Inns received Rs 49.94 crore of proceeds from non-current borrowings and repaid Rs 12.19 crore, producing Rs 37.75 crore of net non-current borrowing proceeds. Net cash from financing activities was Rs 78.57 crore, compared with Rs 7.32 crore in the prior-year half.

What other cash uses affected Foods & Inns' half-year position?

Foods & Inns used Rs 46.27 crore in investing activities in the half year ended September 30, 2026, compared with Rs 58.09 crore in the corresponding 2025 period. Acquisition of tangible and intangible assets was Rs 41.35 crore, up from Rs 15.28 crore a year earlier. Net inter-corporate deposits used another Rs 6.51 crore, while interest received was Rs 2.68 crore.

Combining operating, investing and financing cash flows, Foods & Inns reported a net decrease of Rs 20.35 crore in cash and cash equivalents, compared with an increase of Rs 4.57 crore a year earlier. Its cash-flow statement reported closing cash and cash equivalents of negative Rs 136.01 crore, including negative Rs 139.84 crore described as cash on hand, whereas the September 30 balance sheet separately reported Rs 3.83 crore of cash and cash equivalents and Rs 17.04 crore of other bank balances.

Finance costs were Rs 23.52 crore in the September 2026 half year, marginally below Rs 24.06 crore in the previous corresponding period. Foods & Inns also disclosed an unrealised loss of Rs 1.36 crore on the fair value of foreign-exchange forward contracts for both the September 2026 quarter and half year, compared with an unrealised loss of Rs 5.35 crore in the September 2025 quarter and half year.

Conclusion

Foods & Inns' standalone accounts show that first-half mango procurement coincided with a Rs 147.67 crore inventory build, a switch from Rs 55.34 crore of operating cash generation to a Rs 52.65 crore outflow, and a Rs 127.55 crore increase in reported borrowings from March 31. Revenue from operations was also lower year on year, at Rs 317.19 crore versus Rs 418.98 crore.

The next disclosures should show whether the inventory accumulated in the first and second quarters converts into sales and cash over the remainder of the year. Management has said sales are spread across the year and that first-half results do not indicate the full-year outcome, making subsequent inventory, operating cash flow, current borrowings and finance-cost movements the relevant reported measures to watch.