FX Multitech Limited’s FY26 inventory doubled as turnover fell

FX Multitech Limited reported FY26 profit after tax of Rs 11.54 crore, while stock-in-trade reached Rs 30.40 crore at March 31, 2026, 110% above FY24. FX Multitech’s inventory turnover fell 26.89% to 3.62 times and total cash and bank balances were Rs 11 lakh, against total debt of Rs 18.42 crore.

Why did FX Multitech’s inventory double by FY26?

FX Multitech’s stock-in-trade increased from Rs 14.46 crore at March 31, 2024 to Rs 30.40 crore at March 31, 2026, an increase of Rs 15.94 crore. The FY26 closing balance was Rs 12.16 crore, or 66.64%, higher than Rs 18.25 crore at March 31, 2025. The company reports inventories at the lower of cost and net realisable value, meaning stock is measured after applying that accounting basis.

The stock build-up exceeded FY26 revenue growth. Revenue from operations rose 9.63% to Rs 111.57 crore in FY26 from Rs 101.77 crore in FY25, while purchases of stock-in-trade increased 18.40% to Rs 98.80 crore from Rs 83.45 crore. The change in inventories was a Rs 12.16 crore increase in FY26, compared with a Rs 3.79 crore increase in FY25 and a Rs 1.03 crore reduction in FY24.

What does FX Multitech’s lower inventory turnover mean?

FX Multitech’s inventory turnover declined to 3.62 times in FY26 from 4.94 times in FY25, a 26.89% fall disclosed in its financial statements. Inventory turnover is calculated as cost of goods sold divided by average inventory, so it measures cost of sales relative to the stock held during the year. FX Multitech attributed the decline to an increase in average inventory.

The FY26 decline reversed the movement in FY25, when inventory turnover rose 34.35% from 3.68 times in FY24 to 4.94 times because cost of goods sold increased, according to FX Multitech. Purchases increased by Rs 15.35 crore in FY26, but closing stock also rose by Rs 12.16 crore. For the ratio to rise, cost of goods sold must increase relative to average inventory, or the inventory balance must fall; the disclosures do not state an inventory-reduction target or timetable.

How much cash did FX Multitech have for working capital?

FX Multitech reported Rs 11 lakh of cash and bank balances at March 31, 2026, compared with Rs 1.24 lakh at March 31, 2025 and Rs 9.88 lakh at March 31, 2024. The FY26 amount included Rs 0.85 lakh of cash in hand and Rs 0.83 lakh of bank balances. The remaining Rs 9.32 lakh was fixed deposits with original maturity above three months and remaining maturity below 12 months, including margin money or collateral against borrowings.

Inventory of Rs 30.40 crore and trade receivables of Rs 31.28 crore together represented Rs 61.68 crore at March 31, 2026. Receivables fell from Rs 36.02 crore in FY25, but Rs 2.03 crore of FY26 receivables had been outstanding for more than six months under the company’s broad receivables classification. The balance-sheet position therefore depended primarily on converting inventory and collecting receivables rather than on the Rs 1.68 lakh of cash in hand and bank balances.

FX Multitech’s current ratio, defined as current assets divided by current liabilities, improved to 1.88 in FY26 from 1.66 in FY25. Current assets were Rs 65.89 crore and current liabilities were Rs 34.97 crore at March 31, 2026. Besides inventory and receivables, current assets included Rs 4.10 crore of short-term loans and advances, including Rs 1.89 crore of supplier advances and Rs 1.22 crore of turnover discount receivable.

How was FX Multitech funding the larger inventory position?

FX Multitech reported total debt of Rs 18.42 crore at March 31, 2026, up from Rs 17.32 crore at March 31, 2025. Short-term borrowings were Rs 18.24 crore, including Rs 9.48 crore of cash credit and Rs 7.32 crore of bill discounting. Long-term borrowings were Rs 18.17 lakh, while current maturities of long-term debt formed part of short-term borrowings.

The debt mix shifted in FY26. Cash credit increased by Rs 5.85 crore from Rs 3.63 crore in FY25, while bill discounting declined by Rs 5.80 crore from Rs 13.12 crore. FX Multitech’s borrowing terms state that facilities are secured by mortgages and charges or hypothecation over stock and book debts, while promoters and directors have provided personal guarantees. This links the larger stock and receivables balances to the security available for working-capital facilities.

Finance cost increased faster than revenue in FY26. Total finance cost rose 50.70% to Rs 1.83 crore from Rs 1.21 crore in FY25, including Rs 1.57 crore of interest on borrowings. The debt-service coverage ratio, defined as earnings before interest, tax, depreciation and amortisation divided by debt service, fell 32.62% to 1.91 from 2.83 because debt increased, according to FX Multitech.

Did profit growth offset FX Multitech’s working-capital build-up?

FX Multitech’s profit growth did not remove the working-capital build-up because profit and year-end asset deployment moved differently. Profit after tax rose 19.70% to Rs 11.54 crore in FY26 from Rs 9.64 crore in FY25, and the net profit ratio increased to 10.34% from 9.47%. Revenue increased by Rs 9.80 crore, whereas closing inventory alone increased by Rs 12.16 crore.

Trade payables supplied part of the funding base but declined slightly overall. Total trade payables were Rs 14.34 crore at March 31, 2026, down from Rs 15.59 crore at March 31, 2025, although dues to micro and small enterprises rose to Rs 95.97 lakh from Rs 8.77 lakh. Trade-payables turnover fell 27.39% to 6.69 times, which FX Multitech attributed to higher average trade payables.

Conclusion

FX Multitech’s FY26 accounts show that revenue and profit increased alongside substantially higher capital committed to stock. Inventory rose from Rs 14.46 crore in FY24 to Rs 30.40 crore in FY26, while inventory turnover declined from 4.94 times to 3.62 times in the latest year. The Rs 11 lakh cash and bank balance also remained small compared with Rs 61.68 crore of inventory and trade receivables.

The next reported period should show whether inventory growth moderates relative to sales, whether inventory turnover recovers and whether cash credit remains a larger part of debt than bill discounting. FX Multitech has disclosed no inventory-reduction plan, while its bank arrangements continue to use stock and book debts as security and include promoter and director personal guarantees.