FX Multitech's profit rose while operating cash stayed negative

FX Multitech reported consolidated profit after tax, or PAT, of Rs 11.80 crore for the year ended March 31, 2026, but operating cash remained negative for a second year. Net cash used in operating activities was Rs 99.23 lakh in FY2026 after an outflow of Rs 1.93 crore in FY2025, despite the higher profit.

Why did FX Multitech's operating cash stay negative despite higher profit?

FX Multitech's operating cash stayed negative because working-capital movements and tax payments exceeded cash generated by operations. Consolidated profit before tax rose to Rs 16.27 crore in FY2026 from Rs 12.81 crore in FY2025, while PAT increased from Rs 9.55 crore to Rs 11.80 crore. Operating cash flow, however, includes the cash effect of changes in operating assets, liabilities and income-tax payments.

Operating profit before working-capital changes increased to Rs 19.67 crore in FY2026 from Rs 13.87 crore in FY2025. This measure adjusts profit before tax for non-cash and non-operating items, including Rs 82.74 lakh of depreciation and amortisation and Rs 2.15 crore of interest cost in FY2026. It does not represent cash available after inventory, receivables, advances, payables and taxes.

Operating assets used Rs 16.49 crore of cash in FY2026, while operating liabilities used another Rs 8.84 lakh. As a result, cash generated from operations before tax was Rs 3.09 crore, below the Rs 4.08 crore of net income tax paid. The difference produced the Rs 99.23 lakh operating outflow.

Which working-capital items used FX Multitech's cash in FY2026?

FX Multitech's inventory build was the largest disclosed operating cash use in FY2026, at Rs 13.05 crore. Consolidated inventory rose to Rs 38.26 crore at March 31, 2026 from Rs 25.21 crore a year earlier. Inventory is stock held for sale or use in production, so an increase commits cash until goods are sold and proceeds are collected.

Short-term loans and advances used Rs 3.00 crore in FY2026, compared with a Rs 74.50 lakh cash release in FY2025. The corresponding balance increased to Rs 6.73 crore at March 31, 2026 from Rs 3.73 crore at March 31, 2025. Other non-current assets used a further Rs 52.24 lakh, compared with a Rs 42.91 lakh release in the prior year.

Trade receivables used Rs 34.34 lakh in FY2026, following a substantially larger Rs 18.35 crore use in FY2025. Consolidated receivables were Rs 34.64 crore at March 31, 2026, compared with Rs 34.54 crore a year earlier. The principal operating-asset cash drain therefore shifted from receivables in FY2025 to inventory in FY2026.

How did supplier balances and taxes affect FX Multitech's cash flow?

FX Multitech did not receive a material offset from supplier balances in FY2026. Trade payables used Rs 19.05 lakh of cash, compared with a Rs 10.35 crore cash contribution in FY2025, while other current liabilities and provisions contributed Rs 10.21 lakh after using Rs 38.22 lakh in FY2025. Trade payables are amounts owed to suppliers, and a decline can reduce the cash retained in the business.

Tax payments were also higher than pre-tax cash generated from operations in both reported consolidated years. Net income tax paid was Rs 4.08 crore in FY2026 against Rs 3.09 crore of cash generated from operations before tax; in FY2025, tax paid was Rs 3.27 crore against Rs 1.34 crore generated before tax. The recurring operating outflow will depend in part on whether future operating cash generation exceeds tax payments.

How did the operating cash gap change between FY2025 and FY2026?

FX Multitech's operating cash deficit narrowed by Rs 93.76 lakh in FY2026, but it was not eliminated. Net cash used in operations improved from Rs 1.93 crore in FY2025 to Rs 99.23 lakh in FY2026. The improvement occurred even as inventory used Rs 13.05 crore, because FY2025 included the much larger Rs 18.35 crore receivables outflow.

The FY2026 gap between Rs 11.80 crore of PAT and the Rs 99.23 lakh operating outflow arose from several disclosed cash requirements rather than one item. Inventory, short-term loans and advances, receivables and tax payments together used cash, while trade payables provided no significant support. Cash conversion would require inventory sales, collection of receivables, recovery or productive use of advances, and sufficient operating cash generation to cover taxes.

The consolidated result differs from FX Multitech's standalone cash-flow result. The standalone statement reported Rs 3.66 crore of operating cash inflow in FY2026 after a Rs 1.98 crore outflow in FY2025, whereas the consolidated statement recorded the Rs 99.23 lakh FY2026 outflow. The two reporting bases should therefore not be treated as interchangeable when assessing cash generation.

Did financing inflows support FX Multitech's FY2026 cash position?

FX Multitech generated a Rs 2.06 crore net cash inflow from financing activities in FY2026, offsetting operating and investing outflows. Borrowing proceeds were Rs 12.46 crore, repayments were Rs 8.24 crore and interest paid was Rs 2.15 crore. Financing activities had also generated Rs 3.40 crore in FY2025.

Consolidated short-term borrowings increased to Rs 24.72 crore at March 31, 2026 from Rs 19.92 crore at March 31, 2025, while long-term borrowings fell to Rs 1.39 crore from Rs 1.97 crore. Total reported short-term and long-term borrowings were therefore Rs 26.11 crore at March 31, 2026, compared with Rs 21.90 crore a year earlier.

Investing activities used Rs 67.37 lakh in FY2026, including Rs 63.13 lakh for property, plant and equipment, intangible assets and assets under development, plus Rs 9.32 lakh invested in deposits. Combined with the Rs 99.23 lakh operating outflow, the Rs 2.06 crore financing inflow resulted in a Rs 39.74 lakh increase in cash and cash equivalents during FY2026.

What does FX Multitech's year-end cash position show?

FX Multitech ended FY2026 with Rs 46.20 lakh of consolidated cash and cash equivalents, up from Rs 6.46 lakh at the beginning of the year. The FY2026 closing total comprised Rs 45.25 lakh in bank balances and Rs 0.95 lakh in cash in hand. The increase followed financing inflows rather than positive operating cash generation.

The consolidated balance sheet separately reported cash and bank balances of Rs 55.52 lakh at March 31, 2026, against Rs 6.46 lakh a year earlier. At the same date, inventory of Rs 38.26 crore, trade receivables of Rs 34.64 crore and short-term loans and advances of Rs 6.73 crore were much larger than cash and cash equivalents. These asset balances remain relevant to the future conversion of reported earnings into cash.

Conclusion

FX Multitech's FY2026 consolidated PAT increased by Rs 2.25 crore from FY2025, but operating cash remained negative because inventory, advances and tax payments outweighed pre-tax cash generation. The outflow narrowed from Rs 1.93 crore to Rs 99.23 lakh, while financing inflows supported the increase in year-end cash and cash equivalents.

The next reported cash-flow statement will show whether the Rs 38.26 crore inventory balance and Rs 34.64 crore receivables balance convert into cash without further growth in short-term borrowings of Rs 24.72 crore. The supplied financial information does not disclose a future working-capital reduction plan, leaving that conversion unresolved.