Infrax Renewable’s receivables jump leaves cash flow negative

Infrax Renewable’s trade receivables rose from Rs 22.98 lakh at March 31, 2025 to Rs 11.3852 crore at March 31, 2026, nearly 50-fold, while operating activities used Rs 2.7021 crore of cash in FY 2025-26 despite the Rs 10.2 crore reported profit.

Why did Infrax Renewable’s receivables jump and operating cash flow turn negative?

Infrax Renewable’s working-capital requirement expanded because more funds were held in unpaid customer balances and inventory at March 31, 2026. Trade receivables, meaning amounts due from customers but not yet collected, increased from Rs 22.98 lakh at March 31, 2025 to Rs 11.3852 crore a year later. The increase was about 49.5 times, supporting the description of a nearly 50-fold rise.

Inventory also increased from Rs 5.7465 crore in financial year (FY) 2024-25 to Rs 12.7248 crore in FY 2025-26, an increase of Rs 6.9783 crore. The combination of higher inventory and receivables lifted total current assets from Rs 6.8384 crore in FY 2024-25 to Rs 25.2383 crore in FY 2025-26. These current assets represent cash committed to stock and customer dues before collection.

The movement was substantially larger than in FY 2023-24, when inventory stood at Rs 3.0038 crore and trade receivables were Rs 25.01 lakh. The working-capital gap, defined in the disclosure as total current assets less current liabilities, consequently rose from Rs 4.0933 crore in FY 2024-25 to Rs 16.6584 crore in FY 2025-26. Infrax Renewable says higher trade-receivable days and lower trade-payable days require incremental working capital, although the disclosure does not state the number of days.

How was Infrax Renewable’s FY 2025-26 working-capital gap funded?

Infrax Renewable’s certified funding pattern assigns Rs 12.4667 crore of the Rs 16.6584 crore FY 2025-26 working-capital gap to internal accruals and Rs 4.1917 crore to short-term borrowings. Internal accruals are funds retained or generated within the business rather than newly raised external finance. The disclosed mix changed from FY 2024-25, when short-term borrowings of Rs 3.5626 crore funded most of the Rs 4.0933 crore gap and internal accruals contributed Rs 53.07 lakh.

Current liabilities rose to Rs 8.5799 crore at March 31, 2026 from Rs 2.7451 crore a year earlier, but that increase was smaller than the Rs 18.3999 crore increase in current assets. Trade payables, or amounts owed to suppliers, were Rs 2.1246 crore in FY 2025-26, compared with Rs 65.02 lakh in FY 2024-25. Infrax Renewable separately reports Rs 2.1246 crore of outstanding trade payables for FY 2025-26 and says delayed creditor payments could affect product delivery.

Infrax Renewable projects that its working-capital gap will reach Rs 27.3362 crore in FY 2026-27 and Rs 49.0702 crore in FY 2027-28. Its disclosed funding plan includes Rs 4.65 crore from initial public offering (IPO) proceeds in FY 2026-27 and Rs 17 crore in FY 2027-28, alongside projected internal accruals of Rs 22.2142 crore and Rs 31.5226 crore, respectively. These are projections rather than historical cash flows and depend on the company achieving its collection, inventory and operating assumptions.

What does cash flow reveal about Infrax Renewable’s reported profit?

Infrax Renewable reported net cash used in operating activities of Rs 2.7021 crore in FY 2025-26, compared with net cash generated from operations of Rs 24.24 lakh in FY 2024-25 and Rs 1.679 crore in FY 2023-24. Operating cash flow records cash generated or used by operations, including the effect of working-capital movements, rather than accounting profit alone. The shift to an operating outflow coincided with trade receivables of Rs 11.3852 crore and inventory of Rs 12.7248 crore.

The FY 2025-26 cash-flow statement also records Rs 4.7414 crore used in investing activities and Rs 7.1128 crore generated from financing activities. The financing inflow did not fully cover the combined Rs 7.4435 crore used in operating and investing activities during the year. Financing cash flow is separate from customer collections because it reflects funds raised through financing sources.

The reported Rs 10.2 crore profit therefore does not establish that customer dues were collected in the same period. For operating cash flow to become positive while the business grows, collections must catch up with billed receivables, inventory must convert into sales, and funding must remain available for the timing gap between payments to suppliers and collections from customers. Infrax Renewable states that insufficient cash resources could require additional debt, equity securities or expanded credit facilities.

Which customer and supplier conditions could affect Infrax Renewable’s working capital?

Infrax Renewable says delayed customer payments or customer defaults can increase its working-capital requirement and affect liquidity. The company identifies customer financial condition, creditworthiness, bankruptcy, changes in management and a business slowdown as risks to receivable collection. It says it has not faced such an instance in the past, but the disclosure does not provide a customer-wise receivables concentration figure.

Supplier concentration and procurement terms can also affect the amount of inventory that must be financed. In FY 2025-26, the top 10 suppliers accounted for 65.86% of total purchases, compared with 82.77% in FY 2024-25 and 83.65% in FY 2023-24. The top supplier accounted for 21.09% of FY 2025-26 purchases, and Infrax Renewable says it has no long-term supply contracts with those suppliers.

Geographic procurement remained concentrated in Gujarat, which supplied 85.53% of FY 2025-26 purchases of Rs 74.5435 crore, compared with 97.94% of Rs 26.9122 crore in FY 2024-25. Infrax Renewable says a disruption, price rise or quality failure could delay procurement and project execution. Under fixed-price or lump-sum contracts, the company says its ability to pass higher procurement costs to customers may be limited, potentially increasing cash tied up in projects.

Conclusion

Infrax Renewable’s FY 2025-26 figures show a divergence between reported profit and operating cash generation: receivables reached Rs 11.3852 crore, inventory reached Rs 12.7248 crore and operating cash flow was negative Rs 2.7021 crore. The Rs 16.6584 crore working-capital gap was funded through Rs 12.4667 crore of internal accruals and Rs 4.1917 crore of short-term borrowings under the disclosed funding pattern.

The next point to watch is execution of Infrax Renewable’s funding plan for a projected Rs 49.0702 crore working-capital gap in FY 2027-28, including Rs 17 crore intended from IPO net proceeds. The company also plans machinery purchases estimated at Rs 12.2933 crore for a manufacturing facility, but says orders for the proposed imported machinery had not yet been placed, leaving timing and cost subject to quotations, procurement and implementation risks.