HD Fire cash cycle hits 116 days, operating cash Rs 71.068 crore

HD Fire Protect Limited reported a 116-day cash-conversion cycle in H1FY27 while net cash from operating activities reached Rs 71.068 crore, as a Rs 21 crore working-capital inflow offset higher inventory. The cycle was 14 days above FY26’s 102 days, despite trade receivables falling by Rs 41.4 crore.

Why did HD Fire's cash-conversion cycle reach 116 days?

HD Fire's cash-conversion cycle reached 116 days in H1FY27, up 14 days from 102 days in FY26 and 33 days from 83 days in FY25. The company defines the measure as trade-receivable days plus inventory days less trade-payable days, capturing the period for which cash is tied up between inventory and customer collections.

The H1FY27 reading was also 20 days above FY24's 96 days, making it the highest level across the four periods disclosed. A cash-conversion cycle is not itself a cash-flow statement line item, and the presentation does not disclose receivable, inventory and payable days separately. It therefore does not identify the individual component responsible for the 14-day rise from FY26.

What changed in HD Fire's working-capital balances in H1FY27?

HD Fire's inventory balance increased to Rs 112.4 crore in H1FY27 from Rs 87.4 crore at FY26, a Rs 25 crore rise that coincided with the longer cycle. Inventory was also above Rs 69.9 crore at FY25 and Rs 55.1 crore at FY24, making the H1FY27 closing balance the highest disclosed balance-sheet figure.

HD Fire's trade receivables moved in the other direction, declining to Rs 52.3 crore in H1FY27 from Rs 93.7 crore at FY26, a Rs 41.4 crore fall. Trade payables increased to Rs 34.1 crore from Rs 29.8 crore, a Rs 4.3 crore increase. These closing balances show lower receivables and higher payables alongside higher inventory, but the presentation does not provide average balances or turnover assumptions used in the 116-day calculation.

How did HD Fire generate Rs 71.068 crore of operating cash?

HD Fire generated Rs 71.068 crore of net cash from operating activities in H1FY27 through Rs 91.5 crore of cash generated from operations, followed by Rs 20.4 crore of net direct taxes paid. Cash generated from operations included Rs 70.5 crore of operating profit before working-capital changes and a Rs 21 crore positive change in working capital.

The positive working-capital movement differed from FY26, when changes in working capital used Rs 22 crore of cash. FY25 and FY24 also recorded working-capital outflows of Rs 6.7 crore and Rs 16.1 crore, respectively. The comparison shows that the wider 116-day cycle did not prevent a positive H1FY27 working-capital cash contribution, although H1FY27 is a half-year period and FY26 is a full year.

How did HD Fire's operating cash compare with earnings?

HD Fire reported Rs 236.388 crore of revenue from operations, Rs 67.269 crore of operating earnings before interest, tax, depreciation and amortisation, or EBITDA, and Rs 52.928 crore of profit after tax in H1FY27. Net operating cash of Rs 71.068 crore exceeded profit after tax, while the cash-flow statement recorded a Rs 21 crore working-capital inflow before tax payments.

Profitability margins were lower than FY26 on the presentation's stated measures. H1FY27 EBITDA margin was 28.46%, compared with 30.75% in FY26, while profit-after-tax margin was 22.39%, compared with 23.12%. Gross profit margin was 47.6% in H1FY27 against 48.9% in FY26. The presentation does not attribute these changes to a product group, customer or geography.

What do HD Fire's cash and capital figures show?

HD Fire ended H1FY27 with Rs 15.5 crore of cash and cash equivalents, compared with Rs 14.9 crore at FY26, after a Rs 60 lakh net increase during the half year. Net cash used in investing activities was Rs 17.9 crore, while net cash used in financing activities was Rs 52.6 crore, the largest cash outflow reported for the period.

Capital work-in-progress rose to Rs 23.1 crore in H1FY27 from Rs 17.6 crore in FY26 and Rs 4.1 crore in FY25. HD Fire says its strategy includes expanding the Jalgaon facility with manufacturing, a dedicated fire-test laboratory, industrial warehouse and research-and-development centre, alongside a new production facility and warehouse at Wagale Estate, Thane. Management describes these as capacity and infrastructure measures intended to increase efficiency and shorten lead time, without disclosing cost or completion dates.

Conclusion

HD Fire paired Rs 71.068 crore of H1FY27 operating cash with a 116-day cash-conversion cycle, the highest disclosed figure across FY24, FY25, FY26 and H1FY27. Inventory increased by Rs 25 crore from FY26, while receivables fell by Rs 41.4 crore and payables rose by Rs 4.3 crore. The resulting Rs 21 crore working-capital inflow shows why the cycle and half-year operating cash did not move in a one-for-one direction.

The next disclosures to watch are inventory, receivables and payables as HD Fire advances its Jalgaon and Thane capacity projects. Management says the projects aim to increase efficiency and shorten lead times, while capital work-in-progress stood at Rs 23.1 crore in H1FY27. A subsequent full-year cash-flow statement and cash-conversion-cycle update would show whether the 116-day measure reverses or persists as those plans progress.