HEC Infra Projects’ operating cash outflow more than doubles

HEC Infra Projects Limited recorded a Rs 4.91 crore net operating cash outflow in the half year ended 30 September 2026, more than double the Rs 2.09 crore outflow a year earlier, despite Rs 4.62 crore of profit before tax. A Rs 15.95 crore increase in trade receivables and a Rs 12.14 crore rise in other current assets drove the gap.

Why did HEC Infra Projects report an operating cash outflow?

HEC Infra Projects reported an operating cash outflow because Rs 12.34 crore of net working-capital use exceeded Rs 7.90 crore of operating profit before working-capital changes in the half year ended 30 September 2026. After Rs 47.08 lakh of income taxes paid, net cash flow from operating activities was negative Rs 4.91 crore, compared with negative Rs 2.09 crore in the corresponding 2025 period.

The immediate mechanism was cash tied up in receivables and other current assets. The cash-flow statement records a Rs 15.95 crore use of cash from trade receivables and a Rs 12.14 crore use from other current assets. These outflows were partly offset by a Rs 10.92 crore cash release from inventories and a Rs 6.20 crore increase in other current liabilities.

The operating cash outflow widened by Rs 2.82 crore year on year even as operating profit before working-capital changes increased by Rs 1.54 crore. Trade receivables generated Rs 12.06 crore of cash in the earlier period but consumed Rs 15.95 crore in the 2026 half year. Other current assets remained a cash use, at Rs 12.14 crore in 2026 and Rs 22.99 crore in 2025.

How much did HEC Infra Projects’ receivables increase?

HEC Infra Projects’ trade receivables rose by Rs 15.95 crore to Rs 42.75 crore at 30 September 2026 from Rs 26.80 crore at 31 March 2026. The balance-sheet increase matches the negative Rs 15.95 crore working-capital adjustment in the consolidated cash-flow statement.

Other current assets increased by Rs 12.14 crore to Rs 31.11 crore from Rs 18.97 crore in the six months to September. Together, receivables and other current assets rose by Rs 28.09 crore, exceeding the Rs 10.92 crore decline in inventories. Inventories fell to Rs 30.89 crore at 30 September 2026 from Rs 41.82 crore at 31 March 2026.

Other working-capital movements also reduced operating cash. Trade payables declined by Rs 3.64 crore in the 2026 half year, compared with a Rs 8.24 crore cash contribution in the prior-year period. Other bank balances fell by Rs 2.51 crore, while current other financial assets increased by Rs 20.63 lakh and non-current other financial assets increased by Rs 19.68 lakh.

The balance sheet therefore shows a change in current-asset composition rather than an increase in every category. Receivables and other current assets rose, while inventories and bank balances other than cash equivalents declined. HEC Infra Projects identifies EPC Electro-Mechanical Project as its sole business segment, so the filing provides no segment-level split of the Rs 42.75 crore receivables balance.

Did HEC Infra Projects’ revenue and profit change?

HEC Infra Projects’ revenue rose to Rs 74.75 crore in the half year ended 30 September 2026 from Rs 68.41 crore a year earlier, while profit before tax declined to Rs 4.62 crore from Rs 4.79 crore. Net profit rose to Rs 3.61 crore from Rs 3.56 crore because total tax expense fell to Rs 1.01 crore from Rs 1.23 crore.

The comparison shows reported earnings and operating cash flow moving in different directions. Revenue increased by Rs 6.35 crore and operating profit before working-capital changes rose to Rs 7.90 crore from Rs 6.36 crore. The Rs 12.34 crore working-capital outflow nevertheless resulted in negative operating cash flow of Rs 4.91 crore.

Cost of material consumed was Rs 40.81 crore in the 2026 half year, down from Rs 43.17 crore, while other project expenses fell to Rs 12.54 crore from Rs 23.17 crore. Finance costs increased to Rs 2.99 crore from Rs 1.61 crore. Total income was Rs 75.29 crore, compared with Rs 68.74 crore a year earlier.

For the September 2026 quarter, revenue was Rs 43.64 crore, compared with Rs 31.12 crore in the June 2026 quarter and Rs 40.50 crore in the September 2025 quarter. Quarterly profit before tax was Rs 3.05 crore, nearly unchanged from Rs 3.05 crore a year earlier and above Rs 1.57 crore in the preceding quarter. These quarterly figures do not alter the cumulative cash-flow result for the half year.

How did financing and investing flows affect HEC Infra Projects’ cash?

HEC Infra Projects generated Rs 7.71 crore from financing activities in the half year, principally through Rs 10.70 crore of borrowing proceeds, after Rs 2.99 crore of interest paid. The comparable financing inflow was Rs 2.25 crore, comprising Rs 4.18 crore of borrowing proceeds and Rs 1.61 crore of interest paid.

The balance sheet reported current borrowings of Rs 49.13 crore at 30 September 2026, up from Rs 44.38 crore at 31 March 2026. Non-current borrowings were Rs 5.95 crore, compared with nil at the March year-end. Financing cash flows helped cover the negative Rs 4.91 crore operating cash flow and negative Rs 2.15 crore investing cash flow.

Investing activities used Rs 2.15 crore, compared with Rs 93.53 lakh in the prior-year period. Purchases of other long-term assets were Rs 2.18 crore and property, plant and equipment purchases were Rs 2.75 lakh. The filing also records Rs 4.90 lakh of cash acquired with a subsidiary, identified in the consolidated entity list as Shivam Grid Solutions Private Limited.

Cash and cash equivalents increased by Rs 65.50 lakh from Rs 1.40 crore at the beginning of the period to Rs 2.05 crore at 30 September 2026. In the period ended 30 September 2025, cash and cash equivalents declined by Rs 77.56 lakh to Rs 15.17 lakh. The increase in 2026 followed financing inflows rather than positive operating or investing cash flow.

Conclusion

HEC Infra Projects reported higher half-year revenue of Rs 74.75 crore and net profit of Rs 3.61 crore, but its operating cash outflow widened to Rs 4.91 crore. The main difference between accounting profit and cash generation was the Rs 28.09 crore combined increase in receivables and other current assets, only partly offset by the Rs 10.92 crore inventory reduction and Rs 6.20 crore rise in other current liabilities.

The unresolved matter is whether the Rs 42.75 crore receivables balance and Rs 31.11 crore of other current assets convert into cash in subsequent reporting periods. Investors can also monitor the development of Rs 55.08 crore in total borrowings, after the company recorded Rs 10.70 crore of borrowing proceeds and Rs 2.99 crore of interest paid during the half year.