Eventions Limited Stayed Profitable but Operating Cash Was Negative

Eventions Limited stayed profitable from FY24 through FY26, but operating cash was negative in FY25 and FY26. FY26 total profit reached Rs 7.72 crore, while net cash used in operating activities was Rs 4.52 crore, principally because trade receivables increased by Rs 20.01 crore during the year.

Did Eventions' profit growth translate into operating cash?

Eventions' profit growth did not translate into operating cash generation in FY25 or FY26. Revenue from operations increased to Rs 99.74 crore in FY26 from Rs 87.53 crore in FY25, while profit before tax increased to Rs 10.22 crore from Rs 7.02 crore. Total profit rose to Rs 7.72 crore from Rs 5.13 crore after tax expense increased to Rs 2.50 crore from Rs 1.89 crore.

The reported profit trend was positive across the three financial years, while operating cash changed direction after FY24. Total profit increased from Rs 3.29 crore in FY24 to Rs 5.13 crore in FY25 and Rs 7.72 crore in FY26. Net cash from operating activities moved from an inflow of Rs 29.10 lakh in FY24 to outflows of Rs 2.89 crore in FY25 and Rs 4.52 crore in FY26.

The difference reflects the distinction between accounting profit and cash collected or paid during a period. Eventions recorded FY26 operating profit before working-capital changes of Rs 11.07 crore, calculated after adjustments to profit before tax for items including Rs 18.68 lakh of depreciation and amortisation and Rs 66.75 lakh of finance cost. Working capital refers to short-term operating assets and liabilities, including receivables, advances, payables and other current liabilities.

Why did Eventions' operating cash stay negative despite profit?

Eventions' operating cash stayed negative in FY26 because working-capital movements absorbed more cash than the operating profit before those movements. Cash generated from operating activities was an outflow of Rs 2.46 crore before income-tax payments of Rs 2.05 crore. The resulting net operating cash outflow was Rs 4.52 crore under the indirect cash-flow method prescribed by Accounting Standard 3.

The largest FY26 cash use was the Rs 20.01 crore increase in trade receivables. Short-term loans and advances increased by Rs 2.51 crore, while other current assets increased by Rs 2.96 crore. These cash uses were partly offset by a Rs 10.38 crore increase in other current liabilities, a Rs 1.44 crore increase in trade payables and a Rs 13.26 lakh increase in provisions.

FY25 shows that negative operating cash flow was not solely the result of the FY26 receivables increase. Trade receivables decreased by Rs 2.70 crore in FY25 and added cash, but other current liabilities decreased by Rs 8.30 crore and provisions decreased by Rs 3.23 crore. Cash generated from operating activities was therefore an outflow of Rs 24.28 lakh before Eventions paid Rs 1.95 crore of income tax, producing the Rs 2.89 crore net operating outflow.

How much did receivables drive Eventions' working-capital use?

Trade receivables were the largest identified driver of Eventions' FY26 working-capital cash outflow. The year-end receivables balance rose to Rs 29.87 crore on March 31, 2026, from Rs 9.86 crore on March 31, 2025. The Rs 20.01 crore increase was larger than the company's FY26 profit before tax of Rs 10.22 crore.

Receivables also made up a larger share of Eventions' current assets in FY26. Trade receivables of Rs 29.87 crore represented about 61.6% of current assets of Rs 48.50 crore at March 31, 2026, compared with about 46.5% of Rs 21.22 crore of current assets a year earlier. Receivables were equivalent to about 29.9% of FY26 revenue from operations of Rs 99.74 crore, compared with about 11.3% of FY25 revenue of Rs 87.53 crore.

The higher balance means that revenue reflected in FY26 profit had not yet been collected in cash by March 31, 2026. Operating cash flow would improve if collections from the Rs 29.87 crore receivables balance exceed cash tied up in new receivables, advances and other current assets, without an offsetting fall in operating liabilities. The financial summary provides the annual balance and cash-flow movement but does not provide a receivables ageing schedule or customer-level collection terms.

What funded Eventions' FY26 cash increase?

Eventions' increase in FY26 cash was funded by financing activities rather than operating activities. Net financing cash flow was an inflow of Rs 5.69 crore, against the Rs 4.52 crore operating cash outflow and an investing cash inflow of Rs 35.55 lakh. This produced a net increase in cash and cash equivalents of Rs 1.53 crore during FY26.

Borrowing proceeds totalled Rs 8.90 crore in FY26, while repayments were Rs 3.03 crore and finance costs paid were Rs 66.75 lakh. Eventions also received Rs 49 lakh from a rights issue. Cash and bank balances increased to Rs 1.53 crore at March 31, 2026 from Rs 57,000 at March 31, 2025, while short-term borrowings increased to Rs 8.03 crore from Rs 2.82 crore.

Other short-term asset categories also affect future cash conversion. Eventions held Rs 14.12 crore of short-term loans and advances and Rs 2.98 crore of other current assets at March 31, 2026, alongside Rs 29.87 crore of receivables. Together, those three balances were Rs 46.97 crore, or about 96.8% of total current assets of Rs 48.50 crore.

Conclusion

Eventions' financial statements show that rising profitability did not produce operating cash in the final two reported years. Total profit increased from Rs 3.29 crore in FY24 to Rs 7.72 crore in FY26, while operating cash moved from a Rs 29.10 lakh inflow to two annual outflows. The Rs 20.01 crore FY26 increase in trade receivables was the largest identified reason for the gap.

The next financial disclosures should show whether Eventions collects the Rs 29.87 crore receivables balance reported on March 31, 2026 and whether advances and other current assets continue to absorb cash. Eventions has stated that it may require additional equity or debt financing for expansion, working-capital requirements and other strategic initiatives, making subsequent operating cash flow and financing movements relevant.