HGM cash falls 56% after Rs 5.50 crore related-party loan

HandsOn Global Management (HGM) Limited’s consolidated cash and cash equivalents fell 56% to Rs 2.7934 crore at September 30, 2026, from Rs 6.279 crore at March 31, 2026, as HGM advanced Rs 5.50 crore to a related party and reported Rs 5.0029 crore of net investing cash outflow during the half year.

Why did HGM’s cash fall in six months?

HGM’s cash fell because investing and financing outflows exceeded operating cash generation in the half year ended September 30, 2026. Consolidated cash and cash equivalents declined by Rs 3.4856 crore from Rs 6.279 crore at March 31, while the cash-flow statement recorded a Rs 4.99 lakh positive exchange-rate effect and a Rs 4,000 outflow from discontinued operations.

The largest disclosed use was the Rs 5.50 crore loan given to a related party, classified within investing activities. HGM also spent Rs 23.03 lakh on property, plant and equipment, partly offset by Rs 65.31 lakh of rent received and Rs 7.43 lakh of interest received. Net cash used in investing activities was Rs 5.0029 crore, compared with net investing cash generated of Rs 51.08 lakh in the half year ended September 30, 2025.

How did HGM’s operating cash flow change?

HGM generated Rs 2.0032 crore of consolidated operating cash in the half year ended September 30, 2026, compared with Rs 1.5753 crore a year earlier. The inflow was recorded despite a Rs 4.8395 crore consolidated pre-tax loss from continuing operations, versus a Rs 3.5603 crore pre-tax profit in the corresponding 2025 half year.

A Rs 12.4721 crore working-capital inflow from trade receivables supported operating cash flow, compared with a Rs 9.2266 crore outflow in the prior-year half. Consolidated trade receivables declined to Rs 20.9583 crore at September 30, 2026 from Rs 27.7722 crore at March 31, 2026. The filing reports the cash-flow movement and balance-sheet change, but does not separately identify the underlying collection or billing drivers.

That support was partly offset by a Rs 5.3576 crore decrease in trade and other payables, against a Rs 2.3205 crore increase in the prior-year period. Before working-capital changes, HGM reported an operating loss of Rs 3.8322 crore, compared with an operating profit of Rs 3.4606 crore a year earlier. Taxes paid, including tax deducted at source and net of refunds, were Rs 98.49 lakh, reducing cash generated from operations of Rs 2.9881 crore to the Rs 2.0032 crore operating inflow.

What does HGM disclose about the related-party loan?

HGM advanced Rs 5.50 crore to a related party during the half year ended September 30, 2026, and listed the same amount as a current financial asset at the reporting date. Both the consolidated and standalone balance sheets show a Rs 5.50 crore “loan to a related party” at September 30, while neither showed such a balance at March 31, 2026.

The supplied filing identifies the amount and related-party classification but does not name the recipient or disclose an interest rate, maturity, repayment schedule or purpose. It therefore establishes that the loan was a major investing cash use during the period, but does not establish when HGM expects the Rs 5.50 crore to be repaid or on what terms.

The loan exceeded the total net investing outflow because rent and interest receipts partly offset it. The standalone cash-flow statement also records a Rs 5.0029 crore investing outflow for the half year ended September 30, 2026, including the Rs 5.50 crore related-party loan. In the comparable 2025 half year, standalone investing activities generated Rs 50.19 lakh of cash.

How did HGM’s balance sheet and results change?

HGM’s consolidated total assets decreased to Rs 67.8804 crore at September 30, 2026 from Rs 72.92 crore at March 31, 2026. Cash and trade receivables declined by Rs 3.4856 crore and Rs 6.8139 crore respectively, while the new Rs 5.50 crore related-party loan appeared in current assets. Other financial assets rose to Rs 86.32 lakh from Rs 1.0643 lakh.

Current borrowings were Rs 1.0034 crore at September 30, compared with no current borrowings at March 31. Non-current borrowings increased to Rs 15.4988 crore from Rs 15.2842 crore, and creditor dues other than to micro and small enterprises rose to Rs 7.3506 crore from Rs 5.273 crore. Consolidated other equity moved to negative Rs 32.14 lakh from positive Rs 7.7937 crore over the same dates.

The group’s sole reportable segment is IT and IT-enabled services. Consolidated revenue from operations declined to Rs 21.1711 crore in the half year ended September 30, 2026 from Rs 32.5599 crore a year earlier, while total expenses fell to Rs 27.1191 crore from Rs 30.3317 crore. HGM reported a Rs 4.6142 crore loss after tax from continuing and discontinued operations, compared with a Rs 2.2224 crore profit in the prior-year half.

Standalone cash and cash equivalents were Rs 30.28 lakh at September 30, 2026, compared with Rs 2.6946 crore at March 31. Standalone operating cash inflow was Rs 3.1465 crore, while investing activities used Rs 5.0029 crore. The 56% headline decline refers to consolidated cash; the standalone balance declined by Rs 2.3918 crore over the six months.

Conclusion

HGM’s six-month cash decline principally reflected capital allocation rather than an absence of operating cash generation. The Rs 2.0032 crore operating inflow and a Rs 6.8139 crore reduction in consolidated trade receivables did not offset the Rs 5.0029 crore investing outflow, led by the Rs 5.50 crore related-party loan, alongside Rs 53.54 lakh of financing cash outflow.

The next reporting period should indicate whether the Rs 5.50 crore related-party loan remains outstanding, is repaid or is reclassified, as the September 30 filing does not disclose its repayment terms. Readers can also monitor cash, receivables and current borrowings after HGM reported Rs 1.0034 crore of current borrowings and a revenue decline to Rs 21.1711 crore for the half year.